I’ve recently started to investigate Merchant Service offerings for one of my businesses. I’ve used processing services before and I understand they way the process works fairly well because I even did a stint as a contractor for a service provider.

Offering customers the option to pay by credit or debit card will increase your sales. Today’s society is different than they days of Cash and Carry or Checks accepted. We use plastic for everything. We are a society of convenience. Swipe and go. It is important to make it easy for customers to want to buy from you and pay you.

There are many service providers out there. A google search for Merchant Services will bring up a laundry list. You can work directly with the companies that offer services or you can use a provider that helps you get everything set up. And no, you cannot work directly with Mastercard, Visa, or American Express.

A basic primer for your shopping: When looking into services most companies will charge you a monthly service fee and then you will be charged a percentage plus for each transaction. These fees are on top of your purchase or lease of equipment.

While companies make money on the processing of the transactions, their upfront money is in selling you equipment, which a sales rep will try to maximize. Get the tools that you need to do the job but the most expensive machine is not always the best. If you need a wireless handheld machine, by all means get it. If you are a retail shop, make sure to get a pin pad machine to take debit cards. Understanding the types and amounts associated with your transactions is key.

Most processing companies charge in the following way:

Base rate: X% plus XX cents per transation
If you use a debit card the % remains the same but the cents per transaction is usually less. It is better to use debit when you can and swipe the card in either transaction.

American Express and Discover are always more in the % base rate.

Also, Corporate Cards and Rewards Cards cost more to process as well. (Think: someone has to pay for those gifts).

If you manually have to key in the card you will get charged extra in processing and/or fees, depending on the processor

If you take an online transaction and the credit/debit card is not present you can be charged more in the % and cents per transaction category.

Know what each type of transaction costs with the vendors you research so you can make an educated decision. These rates are set by MC/Visa and change. It is not something arbitrary by the processing vendors.

Typically it takes 3-5 days after closing out/batching out at the end of the day for the money minus the fees to hit your bank account and there are other restrictions for reserves and such based on the industry you are in.

It isn’t that difficult to find this information just know what to look for. A good sales rep will help you but many also just want to close the deal. It is a hard, fast, competitive industry. Find a reputable company and do your research.

Merchant services, in this day and age, are important to many businesses. They HELP you make money because your customers want ease in their transactions. I believe the fees are absolutely worth paying because what you make up in increased customer revenue will far outweigh what you pay to have the services. (But you still have to market and have a great product – don’t forget that part!)