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Q: I’m opening a gift shop and want to accept a position in credit cards. I spoke with the store manager at my bank, but it does not seem sure how it all works. He said I would have so-called “Merchant Account” and anything other than a credit card processor. ” In addition, he seemed as clueless as I am. I think to go. another bank, can you explain how this works? – Mary Ann G.

Mary Ann, I am your banker the benefit of the doubt and say that lack of knowledge about how credit card processing is not necessarily a reflection of the skills of bankers. I have found over the years that most bankers, regardless of experience or knowledge of the banking sector, they know to be my not really understand how credit card processing and acceptance really works. This is because the object of the adoption and verification of credit card purchases is handled by a third party that transformation and deposit (or settle) the funds in a bank account transactions.

The decision to accept credit cards is a wise decision for a retailer. I agree with financial guru Dave Ramsey’s teachings on the use and misuse of credit cards. Many people dig deep holes with credit cards that are hard to come by.

But from a practical business, a retail business that accepts credit cards do not leave money on the table. Research has shown that accepting credit cards increases revenue and helps the flow because you get cash in days rather than waiting until a week for a check.

bounce credit, as some checks have a tendency to do. Credit card users are also more likely to buy on impulse and spend more when they do. Bad news for them, but good news for you. You have a social conscience for the use of credit cards for retail consumption operation probably not the case for you.

To get credit cards at a brick and mortar location, you usually need to accept four things. The requirements may vary a bit, but what follows is true for most cases

you need .. (1) A way to get information from the customer by credit card in a system for handling and processing to get this can be achieved with a terminal slide, point of sale system or by calling the credit card by phone, (2) An enterprise gateway credit card To verify the validity of credit cards and process payments, (3) A merchant credit card account in which the bridge company deposit of the payments to you, and (4) A company bank account in which funds are eventually established deposited for your use

.

Here is how the process works. (1) to make a sale and the customer pays by credit card. (2) With a magnetic card machine or telephone contact with you, what is known as “Bridge Company”, which is the card information that you submit and verifies that the card is valid and the charge can be made against the card account. The gateway company can buy a license code.

With a scanning machine or point of sale terminal verification is done in seconds. If you make a telephone check, it may take several minutes. You call the gateway company, their credit card number and expiration date and they give you an authorization code that you write on the form of credit card charges. In any case, as a rule, money is deposited into your merchant account within 24 to 48 hours (less fees, of course).

You are also required for commercial shipping status with each credit card companies that accept the card you apply. Doing business with American Express and Discover all you need to do is fill out an application, but to accept Visa and MasterCard, you need a merchant account. A merchant account is a special account established for that purpose expressed that accept payment by credit card companies from processing gateway. Merchant accounts are usually associated with banks, but you can also perform credit card merchant service companies account for the same function if you can not get approved for a merchant bank account.

Applying for a merchant account with a bank is essentially the same as applying for a loan. The only difference is sometimes a loan is easier to obtain. It is, the sine qua non, the paperwork and pledge of the firstborn, followed by an approval process is complete up to several weeks. And you’re not guaranteed that the bank approve your merchant account, even if you were a preferred customer for many years. Banks have strict rules for the granting merchant accounts, and if you get a merchant account, however, the bank at risk of losing money, you will be denied. Banks are based the decision on economics, not relationships (no matter what your banker tells you).

requirements for a merchant account depends on the bank, but generally, the Bank will focus on the following criteria:

How long you’ve been in business? Business longevity suggests a history of stability, effective management and good financial shape.

What is your product or service? Your product is suitable for high returns and chargebacks? A chargeback is a disputed credit card, the refund to the buyer and invoiced to your account. Are you chargeback fee, which are made of events available to consult. If your company is suitable for high speeds, you are not a merchant account.

How’s your credit report? Banks always look how much you owe and how much you pay your bills, it is important to have good financial and trade credits have references. If you have a history of late payments or default provider, it will be against you.

What to expect sales and the average transaction amount is? The more you earn, the more money the bank makes. If you can take some credit card fees, a week, so they are not sufficient to justify the merchant account in the eyes of the bank.

Doing business as “high risk merchant?” High risk merchants are those with the highest levels of fraud and credit card is to be contaminated. Traders at high risk include many types of Internet companies, telemarketing, companies and cruise trips and club members. As a trader with a high risk your chances reduced to a merchant account with a bank.

means a high risk merchant not think you can not get a merchant account elsewhere. Thanks to the development of electronic commerce in recent years, there are a number of companies that will offer an alternative merchant account, sometimes with more of a traditional story, but almost always with higher fees.

In addition, not all banks support Internet merchant accounts. If yours does not have n, shop around for someone who is not. We will look at the acceptance of credit cards online instead of in the column next week.

Here’s to your success.

Tim Knox

tim@dropshipwholesale.net For more information about your own business online or on eBay, http://www.dropshipwholesale.net visit

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