Accepting Credit
Cards: Merchant Status for Your Business
A lot of people nowadays, prefer the convenience of
purchasing through credit cards. In the United States, nearly 1 in every 3
consumer purchases is paid through a credit card. It is crucial therefore for
companies to readily accept credit payments to avoid losing sales.
No matter what type of business you run, whether it is a
small shop, online store or mail order business, having a credit card service
for customers will come in handy for your business’ growth. However, one cannot
just accept credit card payments in an instant. In fact, one has to apply to a
number of banks for a merchant status to be able to do this. But once your
merchant status is established, and then your business will be good to go.
How Does Merchant
Status Work?
Your company must first partner with one or a few banks to
be able to accept credit payments. Before doing so, you must apply to these
banks to achieve the merchant status. These banks will work with you to
transfer money paid through credit by customers within a day or two of the
sale. They will also be responsible for collecting the money from the customer,
and in return, your company will pay them a usual commission, ranging from 1.5
percent to 5 percent for each transaction. Other fees may include monthly
support and equipment rentals.
What Do Banks Look
For In Companies Applying For Merchant Status?
Applying for merchant status may be a process much similar
to applying for a loan, as lenders would certainly investigate on your overall
financial status. The feasibility of having credit payments used through your
business will certainly be looked up. Here are some factors that lenders will
need to consider before granting you merchant status:
• Your Business’ Type & Length of Time.
Lenders would certainly need to know whether granting your
company the status might have higher risks for accepting credit payment. For
example, home-based companies may have more difficulty to obtain a merchant
status as compared to companies with stores. Aside from this, companies that are
already established for some time in contrast to those that are only starting
out may be granted status quicker.
• Your Sales Track Record.
Lenders would also be interested to know if your company
could really bring in money to the table. If your company has a dependable
sales track record, then the easier for you to achieve status.
• Your Credit History.
General credit-worthiness would certainly be given much
consideration. Be prepared for your personal or business credit histories to be
investigated. In line with this, lenders may also try to check with your
previous merchant accounts, about your business’ performance as this give
feedback on how credit worthy you are.
What Should You Do To
Achieve Merchant Status?
To prepare your company for application, you must be ready
to have all information about your business as well as your personal credit
history at hand. This includes how you obtain the necessary finances for your
company and how you run things in the company. Requesting for a credit report
for your business beforehand will also be a good move.
Most importantly, be sure that you have maintained a
favorable business and personal credit score for lenders to consider you
faster.
In your small business, establishing a merchant account may
seem unnecessary or too much of a hassle at first, however, once you start
accepting credit payments in your business, you will surely realize how much it
can contribute to improving your company.
It does not only by boosting sales, but it can also provide
much more convenience to your customers and even establish your company. More
importantly, accepting credit card payments will surely improve cash flow.
In the end, once you will see how your small business can
grow by having a certified merchant status, you will realize how all of your
efforts were actually worth it.
iSmallBizPayTech provides flexible credit and debit card
payment processing platforms that help shape the infrastructure of your
business. We are comprised of industry professionals, experienced in dealing
with merchant accounts and credit card processing.
Our mission is to make your experience with payment
processing as simple and easy as possible. We want you to understand our
business. We dedicate ourselves to providing the best customer service in our
industry. We understand the importance of your processing working the right
way, therefore, when you need us, we will be there with strong support.
iSmallBizPayTech provides clients with competitive rates.
All types of industries are accepted including small, medium, and large
businesses.
Charles Colbert is the Managing Director of iSmallBizCredit
and Ismallbusinesscredit.com. Prior to iSmallBizCredit, Charles worked at
American Capital Group and began his career at Bank of America Credit Card Marketing
Division. Charles is the author of Building Business Credit See How Your
Business Can Grow!
Website: www.ismallbusinesscredit.com
LinkedIn: www.linkedin.com/in/ismallbiz
Facebook Fan Page: www.facebook.com/pages/Ismallbusinesscredit
Twitter: @ChazzScot
