If you have a website and you don't accept credit cards then you're losing massive amounts of business. Even if you do accept credit cards it may be worth considering an alternative that will either offer you better rates or save you time.
Infact, if you're within
United States of America or Canada, there are a large range of options open to you.
Unfortunately if you're like me, and are located outside these jurisdictions life becomes a little more complicated - though by no means impossible.
Whatever your circumstances aim of this article is to give you a quick start in accepting credit cards on Internet.
Once you understand basic concepts then hopefully other articles on this site will help you decide exactly what's right for you.
To enable you to accept credit cards online, there are three methods you can use.
They are:
*Gain your own merchant account from your bank *Use a broker or intermediary to gain your own merchant account *Use a third party service
Let's look at these three options in more detail.
The most direct route to gain a merchant account is through your local bank. Many banks will automatically send you details of their own particular service when you open a business account.
The problem with many banks is that as large, powerful institutions many are loathe to accept small businesses and startups.
For example, 12 months or more of audited accounts may be required, business plans or evidence of considerable investment capital.
Add to this fact that many banks are still developing their e-commerce services. You see, banks offer different types of merchant accounts depending on situation.
For example, those accounts for retail are usually considerably easier to gain than an Internet account. This is primarily because retail "swipe card machine" (or PDQ) involves physically swiping card then checking signature.
On Internet of course, number is just typed in and you can't check signature so there's a far greater risk of fraud.
Having said that, banks are slowly starting to introduce services to help internet companies, but in today's business climate I feel certain you'd be better putting your time, energy and cash into gaining a merchant account through second route - using an intermediary.
Intermediate companies do exactly what it sounds - they form a defence between bank and yourself. Whilst this may at first sound like a disadvantage because there's another body to get authorised by, matter is quite reverse.
Intermediary companies understand banks and what they look for in a new client. They can "pitch" your application right and many boast enviable acceptance rates, even for non-US merchants.
The greatest tip I can give you when applying through these companies is this - minimise risk. Of applicants that do get refused many of them are refused on grounds of high risk. That's what these companies look for. So wherever possible, find ways to make your business appear a "safe bet" and you'll greatly increase your chances.
I don't mean lie - far from it - you'll end up in far more trouble than it's worth but...
Aim to start small, selling low priced items. Aiming to sell a few hundred $10 items per month is much less risk than aiming to sell 10,000 television sets. Think small to start off with, then expand slowly.
Prove you're financially solvent - some companies will ask you to prove your personal net worth. They may ask about your credit card bill, mortgage and more so minimise your debt wherever possible.
Whilst I have no evidence to back me up on this point I believe that forming a limited company (so you become Pig Farmers Inc. or Swine Herders Ltd.) makes you look more professional and as result less risky. As one can form such a company over Internet these days for a tiny amount of money I think it's well worth it if in doubt.
You may also be asked about guarantees on your products, monthly overheads of your business, past fraud of any one of a million other questions. For every one you're asked - "How can I instill more confidence and make my business look safer?".
