Finding Solutions for Growing Businesses
MERCHANT BANKCARD SERVICES
Merchant bankcard is an arrangement which allows you to accept charge sales from your customers. Merchant bankcard services can:
- Increase your sales
- Increase your customers' convenience
- Reduce your losses from bad checks
Merchant bankcard services most commonly include the following cards:
- Mastercard
- Discover
- VISA
- Carte Blanche
- American Express
- Diner's Club
There are two parts to a charge sale: authorization and recording the sale.
Authorization protects you from loss by guaranteeing the sale. It may be done by checking a stolen card list, calling an authorization center, or by electronically "swiping" the card through a computer terminal. The computer terminal may be leased or purchased.
You record the charge sale on a sales slip your customer signs. You receive credit for these sales in one of three ways:
- Depositing sales slips in your bank account
- Mailing sales slips to a merchant processor and receiving a check in return
- Using the computer terminal and having sales electronically credited to your
- account.
COST OF SERVICE
There are many different ways that fees for merchant services can be quoted. Some of the more common price components are:
- Maintenance: a monthly fee
- Discount: a percentage of sales paid to the processor
- (generally in the 2% - 5% range)
- Fees charged for specific services, such as a daily letter verifying sales
- Fees charged when certain procedures are not followed, such as when
- a card imprint is not obtained
- Equipment costs
- Telephone costs
The pricing of merchant services varies considerably from provider to provider. You should always compare costs based on the total expenditure, rather than one aspect. Some providers include certain services in the monthly maintenance or discount fees; others may price these services separately. Always make sure you are comparing the same services when you review prices.
CHOOSING A SERVICE
When choosing a merchant bankcard service you should consider the following factors:
- The total cost of all fees
- Convenience for your customers
- (a computer terminal is the fastest way to receive authorizations and record sales)
- Appropriateness (Are the cards you can accept the ones your customers use?)
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