Accepting Credit Cards 4

1 | 2 | 3 | 4 | 5 |
                       
Reprinted with permission from Janet Attard* Copyright 2004. All rights reserved.
     
On the flip side, once you do achieve merchant status in your own name, you should never let anyone talk you into processing their charges through your merchant account.

I've seen companies advertised on the Internet that let you accept charge cards without having a merchant account. Are these legal? And if so, does it make sense to use them?

Some companies do have authorization from merchant banks to accept credit cards on behalf of others. They are usually set up as resellers of products, or as a fulfillment company. Companies that operate this way charge up to 20 percent or more of the purchase price to take orders for you. It is their name that appears on the customer's credit card bill, so there's a risk that customers may not recognize the name of the fulfillment company and may dispute the charge. Although some small businesses find using services like this makes sense, once a business is established and has a steady volume of charge sales, it's usually less expensive to get you own merchant account.

How does having another merchant process your charges differ from what an merchant provider does or from what a fulfillment service does?

The primary difference is that the bankcard company knows about the arrangement and has authorized the company to act as a third-party processor or to take orders. If you are unsure whether a company is legitimately able to process charges for you, ask whose name will be on the bill the customer receives. If it is the other company's name and they do not store your inventory and ship your product to the customer, you would be wise to try to get the name of their merchant bank and verify through the bank that the company does have authorization to process charges for other merchants.

Where can I get names of companies offering merchant accounts?

Start with your own bank, since some banks in some communities will work with small and homebased businesses if the business owner has a longstanding relationship with the bank. If the bank won't offer you a merchant account, ask them if they can recommend a third-party processor who will.

TIP: If your bank does offer merchant accounts, be sure to compare their fees to the fees you will pay using a third-party provider. The third-party provider may be less expensive to use. If the bank can't refer you to anyone, ask other business owners in your area who their merchant card processor is and what their experiences have been with the company. Other good sources of information may be associations or business groups to which you belong.

I really don't know any business people in my community and I don't belong to any associations. Where else can I get names of companies offering merchant status?

You can find dozens of merchant account providers by searching the web for the term Merchant Account Provider. Make sure you read and understand all details of any agreement you sign with any company.

NOTE: If you are going to be selling products on the Internet, don't sign an agreement with a merchant provider until you find out if their gateway software works with the web shopping cart you plan to use! Otherwise you could find you're stuck with a merchant account that doesn't work with your website.

Automated Real- Time Processing (for Internet sales)

Authorize.Net Corporation
915 South 500 East Suite 200
American Fork, UT 84003
(801) 492-6450
Fax: (801) 492-6489
http://www.authorizenet.com/
http://www.authorizenet.com/solutions/ [Merchant solutions]

Authorize.Net has a list of merchant account providers and shopping carts compatible with its system on its web site at http://www.authorizenet.com/reseller/directory.php.

VeriSign Payment Services
487 East Middlefield Road
Mountain View, CA 94043
Phone: 888-847-2747
FAX: 650-426-3149
http://www.verisign.com/products/payment.html

You can find many other merchant account providers by searching the web for the term merchant account. Compare what each has to offer, and don't deal with any company that won't answer all your questions and provide you copies of agreements it expects you to sign. Go over all contracts and agreements carefully making sure you understand every word in them. Finally, be sure to ask other merchants what rates and fees they are charged for processing cards and what bank or merchant account provider they deal with. Compare what you are being offered with their experiences, and proceed with care.

1 | 2 | 3 | 4 | 5 |