As a business owner, you know the importance of accepting debit and credit cards
from customers. Most consumers have access to one or both payment methods and rely on them heavily for their purchases. By accepting cards, you reduce the risk of losing a sale just because a customer does not have cash or checks, increasing sales as a result. To receive credit cards as a form of payment, you need to obtain a merchant account and develop a relationship with a merchant services provider.

Know the basics of a merchant account

A merchant account is where you transfer funds from your customer’s debit or credit card purchases. You won’t have access to the funds in this account until it hits your business banking account, which usually takes 1 to 2 business days.

By developing a merchant account, you also obtain debit and credit card processing services through the merchant services provider. This can get more complex if your business is high risk. Look for companies like Davis Thorpe and Associates which specialize in working with a variety of businesses. We also offer an e-check service, which is great if you are not ready to open a merchant services account.

Processing credit and debit card payments

Once your account is set up and you accept these forms of payment, the processing service will confirm the funds are available. If the conditions are met, the transaction will be approved. Once it’s complete, your business bank account receives the funds.

Keep in mind you won’t receive all of what your customer pays you. That’s because you both pay an interchange fee that goes to the credit card association, as well as a processing fee that goes to your merchant services provider. Make sure whichever merchant services provider you use they are transparent about their fees. Processing fees can vary, but generally, you pay roughly 3 – 5% for each transaction.

Now that you’ve begun to accept debit and credit payments, you’ll need to keep track of all this activity. Most merchant accounts provide statements and online reporting so you can maintain accurate records.

Although it can seem overwhelming, opening a merchant account is a smart move for your business. Make sure you do your research and compare a few different providers before you decide on one.