A business without a credit card merchant service is almost outdated

From: christianet.com

Credit card merchant services allow a business to offer consumers immediate bank transactions that are reliable and encrypted to prevent any security breach. Business owners shouldn't be lazy, but work to determine what their customers need and what is most useful. These services tend to be very convenient by allowing cashless transactions. The merchant, perhaps using an account provider, maintains an account at a financial institution and is willing to pay extra and wait 2-3 days for payment to reach his business account. Credit card merchant services are one of the conveniences a business can offer customers who are less likely to carry cash and more likely to spend liberally with a card. More and more, these services include Internet transactions through a secure payment gateway as well. All of this for about a $100 processing fee or an agreement to purchase proprietary software or equipment or pay higher transaction fees, just so that a customer can have an added convenience and a monthly record of expenditures on their account statement. This way, each "charge" transaction seems easy and instantaneous, but credit card merchant service is actually very involved. Shoppers can go to the check out counter or web shopping cart with "plastic" instead of cash because of credit card merchant services. At a business, the merchant provides a device for shoppers to enter all relevant account information (number, expiration date, amount of purchase). On the Internet, a specialized form connects to the website host's secure server, and information from both transactions flows to the merchant's processing bank. Consumers may be unaware that the credit card merchant service charges a fee for each transaction, paid by the business who passes the cost on to customers in higher prices, just to make sure the card is valid and that funds are available to pay the bill. If all is well, the service provides an authorization code back to the processor, sends permission through encryption, and the transaction order is fulfilled. That is when the customer gets a receipt. To offer customers this convenience, most business owners are familiar with credit card merchant services allowing them to process the payment from a counter terminal, an internet virtual terminal, or by phone. It only takes 24 hours to a few weeks to set up an account; the longer time is needed for international accounts. Every month, the business is billed a processing fee unless sales are over a certain a few thousand dollars. Businesses will pay more for all transactions that are over the Internet, phone, or through the mail because it is less secure than a face-to-face transaction where ID can be seen. Behind the scenes, credit card merchant services provide every business owner with the capability of expanding sales, but the reverse is true as well.

Advantage to real-time credit card processing is that the transaction is processed immediately

From: writeedge.com

Most credit card processors will also verify the customer's address to make sure that it matches the address on file with the card's issuing bank. Credit cards can either be processed in real-time or collected and batch processed. Real-time processing means that the customer enters credit card information, it is immediately accepted or denied, the customer is notified, and if it was accepted, the transaction is concluded. Batch processing means that a number of credit card transactions are processed together at a later time. The obvious advantage to real-time credit card processing is that the transaction is processed immediately and the customer knows whether or not it has been approved. However, the risk of fraud is greater with real-time processing, because you take the chance that a stolen card is being used before it has been reported stolen.

Another disadvantage to using real-time processing: if your credit card processor's server goes down, you cannot accept any orders. Batch processing can be the better option for smaller businesses because it lessens the risk of fraud. Although you can perform batch processing by collecting the information and then phoning it into your bank, contracting with a credit card processing company allows you to process transactions via the Web or through dial-up networking. In addition to being faster, computerized processing also reduces the risk of error. If you’re merchant account provider doesn't offer card processing, research your online options carefully. Many credit card service providers are allowing resellers to become involved in the process, so it pays to know who you're dealing with. It's also important to make sure that your bank will work with your credit card provider.

Merchant Accounts & Other Payment Solutions

From: merchantseek.com

Merchant services, accept credit cards online and other payment processing solutions is vitally important to the success of your business. The fact is, your businesses success or failure can depend on whether or not you accept credit card orders. Searching for a good deal on a merchant account is a slow and tedious process. Now, the hassles of searching the Internet endlessly to find the right merchant account are over, no more time consuming searches on the search engines, because we've done the searching for you. An online database is there that provide nothing but providers who issue merchant accounts, to aid you in the process of locating a provider that is right for your businesses needs and budget.

Credit Cards Can Make Your Business Flying

From: businesslink.gov.uk

Convenience - cards are quicker and cheaper to use than the company chequebook. They're useful for everyday expenses and can be used over the phone and Internet.

Credit - if you accept credit cards to cover business expenses, you don't have to settle the bill immediately - you can benefit from an interest-free period of up to 40 days, dependent on which card supplier you use.

Cards are globally recognised - using cards for foreign-travel purchases may give you better exchange rates as card issuers have more buying muscle and reduces the need to change cash before travelling.

Ability to monitor expenditure - you can specify which employees receive cards and set different credit limits for each card.

Fast access to cash - you or card-holding employees can withdraw cash from cash machines. However, credit and charge card issuers will levy a commission each time. And, with credit cards, you will pay interest from the day the cash is withdrawn regardless of when you settle your bill.

Reduction in administration - with a company credit or charge card, you pay one bill each month, no matter how many purchases you make. Receiving monthly statements helps with your accounting and administrative procedures. As purchases are specified you can distinguish business from personal expenses. Your provider may also be able to supply a report of your annual expenditure and a breakdown of the VAT charged on purchases - far more convenient than ploughing through piles of receipts.

Many companies offers a complete bill management service

From: businessknowhow.com

Net savvy small businesses and consumers are turning to a unique on-line service for simplifying their busy lives e-payment programs. What was once thought to be a risky, unsecured endeavor, e-payment has become a way of life for the web-at-heart. Don't confuse e-payment systems with on-line auctions, and credit card processing. E-payment has evolved into a full blown service for on-line bill management and the capacity to send cash through an ordinary email. Here are a few programs worth visiting.

Many companies offers a complete bill management service, boasting the highest levels of password security and extreme privacy. You can receive all your bills on-line, get an email when they're posted, and authorize payment. All of this can be done anywhere, anytime.

Here's how it works:

• You select which bills you want to receive on-line.
• Paytrust notifies the accounts to send bills electronically (or by mail) to their credit card Processing Center.
• When your bill arrives, you get an email from Paytrust indicating the bill has been posted and ready for your review and payment authorization from your on-line bank account.
• You access the bill center, review the billed details if necessary, and click to authorize payment.
  
  The major advantages of e-payment systems are the reduction of paperwork, mailing cost, ease of on-line data and financial information storage, and the ability to access the web at any time for accurate real time information.

The category of credit card processing in a transaction is one factor that determines how a transaction is classified

From: inc.com

In online business today, accepting credit cards is a must. Consumers enjoy both the convenience and the security of buying with a credit card. Each of your transactions will be classified as either qualified, midqualified, or nonqualified. These three classifications are based on Visa/MasterCard regulations. Transactions that do not satisfy all qualified transaction conditions, as established by Visa and MasterCard, are assessed either a midqualified or a nonqualified surcharge.

The category of credit card processing in a transaction is one factor that determines how a transaction is classified. Other factors that determine whether a transaction is classified as qualified, midqualified, or nonqualified are whether the address verification system (AVS) was used and whether the order was shipped within 24 hours. Most merchant service providers charge a discount rate for each transaction, bundled with a per-transaction fee. The term discount rate is a misnomer because there's really no discount involved. This rate is a percentage applied to the dollar value of each transaction. The per-transaction fee is a flat fee charged for each transaction.

Major risk involved in merchant services

From: netregistry.com.au

Merchant services have various types of merchants and Fraud is definitely a risk for merchants. However, it is important to remember that these risks are mitigated through sound business practices, just as they do for regular shop fronts. It is critical that all customers are accurately identified as the credit card processing systems are designed to protect the cardholder in the case of fraudulent usage. Credit cards were originally designed for face-to-face transactions where the shop merchant could prove that the customer was in the shop with a signature or magnetic swipe of a card. Under no circumstance should goods be sent unless the merchant knows with certainty that who the purchaser is.However, it is important to note that the majority of e-Commerce credit card fraud worldwide is perpetuated by staff of merchants. Hence it is imperative that all merchants fastidiously protect cardholder and transaction details. Basic business rules of restricting access to this information and employing risk management systems such as the Visa Account Information Security programmer will substantially minimize this.

Think of the costs associated if the merchant account provider is doing things right

From: myinternet-credit-card-processing.com
A smart business owner knows that accepting credit cards as a payment option will dramatically increase revenues. Not only do credit cards offer customers the convenience and ease of not having to carry around cash or checks, it lends a sense of professionalism to your establishment as well. The process of applying to become a credit card merchant can be explained as.
The Credit Card Account
The credit card account that you will use is called a merchant account. These accounts are different from a regular business checking account in that they are accounts that have been secured through a bank that offers credit card processing. This account enables you to process your credit card transactions through their banking establishment. This is a safe and secure process which provides both you and the buyer security and protection. Since most of the merchant accounts are offered by a third party vendor, you are not obligated to use any specific bank or institution. You are free to choose the one that offers the options that will work best for you and your company.
What you do need to pay attention to are the fees. These fees will come in three different forms.
· The initial setup fee (pretty self-explanatory).
· Moving on to the percentage fee (the provider will take a percentage of each transaction based on amount of sale).
· Then ending with the monthly service fee.
Think of the costs associated if the merchant account provider is doing things right: Software and virtual gateway development costs, network costs, security costs, fraud examiners cost, customer service reps, administrative costs, hardware costs, mailing costs, bank fees, etc. It is important to read the contract that comes from the merchant bank. This is where you will finally see all the real costs. You can always expect to see a gateway fee, a statement fee, a transaction fee (both flat and percentage), a charge back fee, and a monthly minimum fee and there is sometimes variation based on how much information is sent through the gateway when the card is processed.
Also, look for contract obligations. Some providers will offer you great deals but will want you to sign on with them for a long period of time. You need to be aware of what, if any, penalties will be charged for getting out of the contract if things don't work out.

How Do I Actually Get Paid

From: myinternet-credit-card-processing.com

Obviously, this is pretty important. If a customer has used a credit card, no money has actually changed hands. Since more and more customers are now using credit cards, how that money gets into your account and how fast has become vitally important.

Any of the reputable merchant account providers will provide the business owner with payment into their account within the first 24 to 48 hours of the initial transaction. Whether that customer has a balance on that card is not a concern of yours. The bank will pay you anyway. If the customer disputes the said transaction, the bank is usually under no obligation to pay the business owner, especially if that dispute has been deemed acceptable. If a business owner has a high number of legitimacy claims against them, the provider may just drop them. The majority of the time, though, things goes as planned and the money shows up in your account within a day or two. Any smart business owner knows that accepting credit cards as a payment option will dramatically increase revenues. Not only do credit cards offer customers the convenience and ease of not having to carry around cash or checks, it lends a sense of professionalism to your establishment as well. The process of applying to become a credit card merchant can be a bit confusing and frustrating, so let's take a look at how it all works.

The Credit Card Account
The credit card account that you will use is called a merchant account. These accounts are different from a regular business checking account in that they are accounts that have been secured through a bank that offers credit card processing. This account enables you to process your credit card transactions through their banking establishment. This is a safe and secure process which provides both you and the buyer security and protection from the beginning of the transaction right through to the end.

Most shopping cart systems are "pre-programmed" to allow easy credit card processing. Most shopping cart companies integrate with something called "virtual terminals" or "gateways." In order to use these gateways you need to signup with a gateway company (Gateways are special pieces of online software that securely pass credit card information from the shopping cart to the merchant bank. Some merchant accounts provider bundle a gateway with the merchant account. Monster Merchant Account is a specialty online merchant account provider that bundles a gateway and merchant account into one package. These bundled programs are an excellent choice as they limit headache and provide for single phone call support. Since most of the merchant accounts are offered by a third party vendor, you are not obligated to use any specific bank or institution. You are free to choose the one that offers the options that will work best for you and your company.
What you do need to pay attention to are the fees. These fees will come in three different forms. First, the initial setup fee (pretty self-explanatory), moving on to the percentage fee (the provider will take a percentage of each transaction based on amount of sale), and then ending with the monthly service fee. Read the fine print of any contract before signing it. Pay attention to all three fee categories, not just one. Also, look for contract obligations. Some providers will offer you great deals but will want you to sign on with them for a long period of time. You need to be aware of what, if any, penalties will be charged for getting out of the contract if things don't work out.

Use Corporate Cards for Easy Expense Accounting

From: allbusiness.com

Wondering how you're going to handle the ever-expanding pile of expense reports and receipts you receive every month? The pile is only going to grow as your company expands and sends more employees out on the road. Do yourself and your bookkeeper and chief financial officer a favor and sign up everyone in your company for a corporate credit card now. The concept behind corporate credit cards processing goes beyond making sure that your employees have a line of credit in an emergency. The big boon behind corporate credit cards is bill consolidation. Instead of receiving dozens of different hotel, rental car and restaurant bills each month from different employees using various methods of payment, your company will receive one large bill broken down in various ways by type of charge, by employee name and by date. With bill consolidation, you will actually be able to watch travel and entertainment expenses and forecast what they might be in the future. Annual budgeting for such expenses will be much easier.

Corporate credit cards also simplify travel and entertainment expense reporting for employees. Thanks to new software, employees who use a corporate credit card don't have to file a paper expense report anymore. Instead, they just scroll down an online computer file of their expenses and check which charges the company should pay (since the card is for business purposes, this is only really a checks and balances system). Your company's accountant or controller then logs on, checks what expenses the employee has approved and pays the bills.
Some employees may balk at the thought of using a corporate credit card over their personal charge card. Those employees are worried about earning miles. Up until a few years ago, miles earned on corporate credit cards were given to the company paying the credit card bill. Times have changed, however, and American Express, Citicorp's Diners Card, Bank of America Visa and others now allow the employee to reap the mile benefits.

A few other benefits of using corporate credit cards:

· Travel insurance. With American Express, you can insure your travelers with up to $200,000 travel accident insurance, and $1,250 in baggage insurance.

· International charges. If you use your corporate card overseas, pay close attention to currency exchange rates and extra transfer fees. You never know when you'll get a credit card call to Berlin routed through Madrid and charged to you in North Carolina.
As small businesses continue to dot the landscape, credit card companies are beginning to offer better corporate credit-card deals to growing businesses. If you hit the right offer at the right time, you might be able to land your company, and your employees, some great deals.

The ABCs of Business Credit

From: entrepreneur.com

As an entrepreneur, did you know you have a unique opportunity to build, maintain and acquire credit both individually and as a business owner? That's good news if you're trying to build and grow a company because you won't have to rely solely on your personal credit to do that.
As a member of the business credit industry, it's been my experience that fewer then 10 percent of all entrepreneurs know about or truly understand how business credit is established and tracked. So let's first take a look at how personal credit differs from business credit. Then we'll discuss some steps you can take to build your business credit.

Personal vs. Business Credit
At the point an individual with a social security number accepts their first job or applies for their first credit card processing, a credit profile is started with the personal credit reporting agencies. This profile, otherwise known as a credit report, is added to with every credit inquiry, credit application submitted, change of address and job change. The information is typically reported to the credit bureaus by those who are issuing credit. Eventually, the credit report becomes a statement of an individual's ability to pay back a debt. In some cases, the same is true for businesses. When a business issues another business credit, it's referred to as trade credit. Trade, or business, credit is the single largest source of lending in the world. Information about trade credit transactions is gathered by the business credit bureaus to create your business credit report using your business name, address and federal tax identification number (FIN), also known as an employer identification number (EIN), which you get from the IRS. The business credit bureaus use this compiled data to generate a report about your company's business credit transactions. In many cases, those issuing credit to you will rely on your business credit report to determine if they want to grant you credit and how much credit they'll give.

The major business credit bureaus that compile and provide copies of the reports are:

· Dun & Bradstreet
· Experian Business
· Equifax Business
· Business Credit USA

Unfortunately, because the information provided to the business credit bureaus is sent in voluntarily--no business is required to send it in--the credit bureaus may never receive all or even any information about your business credit transactions. In fact, you could go for years racking up business credit without any of it being reported to the credit bureaus.

Don't fall victim to online credit card fraud

From: smallbusiness.yahoo.com

Have high hopes for your Internet storefront this holiday shopping rush? Be aware that the number of online shoppers is not the only thing expected to skyrocket this season online credit card fraud is expected to rise as well, costing merchants $400 million by the end of the year. Developing an anti-fraud strategy now could help lessen your share of the burden. Internet merchants assume more risk and much higher penalties for credit card purchases than do brick-and-mortar stores: that's because nearly 10 percent of all Internet transactions are fraudulent, compared to less than 1 percent of credit card transactions in regular retail stores, according to a 1999 study by Massachusetts-based Meridien Research. And online fraud is only expected to get worse. Why are online fraud rates so high? Unlike face-to-face transactions, where a signed receipt serves as a contract protecting the merchant against identity fraud, transactions made over the phone or online do not guarantee the card user's identity. Even worse, the merchant must assume all the risk in such non-face-to-face transactions. If you're hit by e-fraud, your total costs add up to the cost of goods sold, bank and card processor fees (including higher discount rates, "chargeback" fees, fines up to $100,000, even termination of service for excessive chargebacks), the cost of manually resolving bad transactions, and the cost of losing valid orders through a decline in customer loyalty. You can fight back with fraud detection software, available either separately or as part of your credit card processing service.

Anti-fraud tools include real-time authorization to ensure the card number and expiration date are valid and that customer funds are sufficient; address verification systems, which help identify transactions where the billing address does not match the shipping address; rules systems that flag certain types of transactions based on customizable if/then statements; and statistical models that learn by example and correlate transaction attributes with known fraudulent activity.

While none of these tools are foolproof, using a combination can help you weed out high-risk transactions. However, the higher degree of fraud protection you seek, the more you'll pay, perhaps thousands of dollars of one-time fees on top of per-transaction fees. If you can't afford such tools, don't fear. There are some simple steps you could take to try to protect yourself from stolen credit card numbers and other online fraud. Keep an eye out for typical fraudulent behavior, such as unusually large dollar orders of many low-priced items. Flag large orders that ask for express or P.O. box shipping. E-mail a receipt of the order to the e-mail address provided a bounced message may indicate a fake e-mail address. If you ask for a phone number, make sure you verify it. Know your average order amounts and note any unusual numbers. These low-cost measures can help you plan your risk-management strategy and keep your online store humming through the holidays.

The Fastest Way to Finance Your Small Business

From: allbusiness.com

When you need cash in a hurry, you will find plenty of lenders ready to loan you money at exorbitant rates. Unscrupulous loan brokers routinely prey on small business owners who find themselves in need of fast cash. But there are other options for getting the money you need quickly and relatively cheaply.

Pick the right type of loanThe type of loan you select will have a big impact on how quickly you get the money you need. Secured personal loans, home equity loans, and merchant accounts receivable loans can all get you cash quickly. If you have collateral, such as your home, a secured personal loan may be your best bet for your short-term cash needs. Since you are offering collateral, the lender's risk is reduced significantly, and they will be more likely to approve your loan. The reason is because the bank has protection if you default-if you can't make your payments the bank has a way to recoup their losses by selling your assets. If you own your home, a home equity loan is another option. If you go through the company that holds your mortgage, you can reduce the approval time even further. Of course, there may be significant risk involved; if your business fails, you may lose your home as well. If you can show that you have significant receivables due in the near future, you may be able to use them as collateral for your loan. Rates for accounts receivable loans are higher than most other commercial loans, but they can be useful to even out your cash flow if you have no other collateral to show.

The loan application packageAnother way to expedite the loan process and to help ensure approval is to present an attractive application package. Here are some of the components of a solid loan application package:

· Good credit history and rating
· 35 percent of combined personal and revolving credit available, including credit cards and lines of credit
· No excessive late payments, collection activity, charge-offs, judgments, tax liens, repossessions, or bankruptcies
· Strong financials that are consistent with your credit history
· Verifiable income and profit
· Sufficient assets to use as collateral.

If you meet these criteria, you most certainly will quickly attract quality lenders. Having all required paperwork ready, such as a detailed business plan and tax documents, will further speed up the process.

Equipping your card service

From: smallbusiness.yahoo.com

Many businesses, when they first sign up for a credit card merchant accounts, opt to buy the least costly equipment to minimize their startup costs. When this equipment appears to work years later, this can seem like a wise decision. However, it may still be time to consider upgrading or replacing your equipment. But if it works, why replace it? Well, for starters, your credit card processing equipment may not be working as well as you think. Unbeknownst to you, your terminal may literally be dropping transactions. You can tell if this is happening by comparing your monthly merchant accounts statement to your credit card receipts. Taking the time to do so can be an eye-opening experience. Even if your terminal is not losing charges, the transactions may be more costly than they need to be. Rather than chalking it up to customers with faulty cards, it is more likely that you have a malfunctioning card reader. Manually entering a credit card number is not only inconvenient, but also more costly. Credit card processors typically charge half a percent or more for keyed-in transactions than for swiped charges. If you find that more than one percent of your transactions require entering, you can probably see an immediate improvement in your profitability by replacing your equipment.
Checking out your latest options can also help grow your sales.

The pool of available non-cash transactions has broadened greatly in the past few years. In addition to credit cards, merchants can now take checks, debit cards, and checks. And now, there is the smart card. If your equipment is dated, you may not be equipped to handle one or more of these forms of payment, and potentially lose these sales altogether. How much will it all cost? If you have no plans to accept debit cards, a plain vanilla terminal will cost about $300 for a new model. With one of those models, you will be able to process credit cards and some checks. Adding a PIN pad so you can accept debit cards and all types of checks will double your cost. And if you want an integrated printer, add an additional $250 to $400 depending on whether you go for a low or high-speed printer. No matter where you end up getting your equipment, make sure it is compatible with your processor. Otherwise, you may find that while you may be able to swipe a card, you will not be able to close the sale

Technology Requirements for Processing Credit Cards on Small Business Web Sites

From: smallbusiness.yahoo.com

Accepting credit cards is essential for any e-commerce Web site. If you are ready to start processing credit card transactions yourself, you will need the right infrastructure. Before you select an e-commerce Web host and a merchant account provider, make sure they can provide you with the features you need.

Secure payment area. This protects credit card data and other sensitive information from hackers during the transaction process. Identity theft and credit card fraud are running rampant on the Internet, and you need to ensure that your customers are protected. Many consumers will not buy from a site that does not provide secure transactions.
You can help secure your site by having a secure socket layer certificate, or SSL. SSL encrypts information being entered on your site as it is sent across the Internet. You can purchase this certificate yourself, or your Web host may let you use theirs as a part of its service.

A compatible shopping cart application. Make sure your shopping cart application can "talk to" your payment-processing gateway. There are hundreds of different payment gateways, and each one has a specific set of standards. Many free shopping carts do not support all of the available payment gateways. Check with your merchant account provider or consult your shopping cart documentation to make sure that all the elements will work together.

PGP encryption. If you plan on accepting orders and sending or receiving credit card information via email, you will need to encrypt the information that is sent. PGP, which stands for "pretty good privacy," is the most common form of email encryption. PGP encrypts emails when they are sent and decrypts when the information has reached its intended recipient.
If you do plan to use PGP, you will also need to make sure that your email client supports it. You will also need to keep your security key in a location where it cannot be accessed by anyone else. You can learn more about PGP encryption by visiting PGP's Web site.

A firewall. If you store your customer's data or credit card numbers on your server, it is vital to have a sitewide firewall to protect this information. Many companies have exposed their customers to hackers by neglecting to implement a proper firewall. If you are not certain how to install a firewall on your site, check with your Web hosting company for more information.
After you have taken care of these technology requirements, you are ready to offer your customers an easy way to purchase your items. You can also give them the peace of mind in knowing that you are looking out for their best interests by providing a safe and secure payment processing solution.

Avoiding Credit Card Fraud on Your Small Business Web Site

From: smallbusiness.yahoo.com

If you do business on the Web, you should be concerned about credit card fraud. With identity and credit card theft running rampant, you need to assure your customers that you are committed to protecting them from fraudulent transactions. While it's not practical to screen every single transaction that goes through your processing system, there are steps you can take to make sure that you are not accepting stolen or fraudulent credit cards on your small business Web site. Here are just a few.

1. Require a credit card verification number on all purchases. Also referred to as a CVV (card verification value) or CVV2, this three-digit number is located on the back of every Visa and MasterCard. Requiring a CVV cuts down on fraud from stolen credit card processing statements or numbers that are plucked off of the Internet. However, if the thief actually has the credit card, requiring the CVV won't help.

2. Use an account verification system. Also known as AVS, this system checks on the billing address of the card to make sure that the ZIP code and other information matches. This can greatly decrease credit card fraud as long as the thief does not have access to the card holder's billing address.

3. be skeptical of "throwaway" email addresses. Cyberthieves often use free webmail addresses from providers like Yahoo and Hotmail, so view these addresses with suspicion. Of course, the vast majority of people who use these providers are legit, so don't paint all webmail users with the same brush. But if something does not feel right about a transaction, this can serve as a warning flag.

4. when in doubt, contact the customer. If you suspect something is amiss, contact the customer to confirm the order. If the information is correct, there is no harm done. However, if the phone number does not work, or the person on the other line seems unduly nervous, you can cancel the transaction before any harm is done.

5. Look at billing and ship-to addresses. Although this is not a foolproof screening method, if the billing and ship-to addresses are radically different, beware. Sometimes addresses are different because buyers would like the item shipped to their office or shipped somewhere else as a gift, if the addresses are in different states, proceed with caution.

6. Hire a fraud-prevention service. If you are concerned about credit card fraud, there are many different companies that can help you ensure that you are not processing any fraudulent transactions.

E-Commerce Agreements

From: smallbusiness.yahoo.com

Commercial Web sites will often sell products or merchant services provided by a third party. For example, your Web site may sell specialized equipment or internet-related services that will be provided by another company.

An E-Commerce Agreement can be the document that sets forth the contractual relationship between the Web site owner and the third party. The E-Commerce Agreement can cover the following matters:

· Product or Service. What is the product or service to be marketed on the Web site? Is it a whole category of products or services or only specific items?
· Fees. What fee or commission will the Web site owner get if the products or services are sold through the site?
· Customer Payment. How will customers pay for the purchases? Is the mechanism to be run through the Web site owner's site or through the third party? Who handles credit card related issues?
· Customer Information. Who will be deemed to "own" the customer and the information provided by the customer? Ideally, the Web site owner would "own" the customer as it was through its efforts that the customer was obtained. The third party, however, will often insist upon ownership rights. A compromise that is sometimes employed is that the parties "co-own" the customer or that each party has certain rights to use the customer information. Of course, this should all be consistent with the site's "Privacy Policy" and applicable law.
· Trademarks and Logos. The Web site owner will typically want to use the trademarks and logos of the third party on the site, and the agreement should grant the Web site owner a limited right to use such trademarks and logos.
· Term. What will the term of agreement be? Often, simple agreements are on a year-to-year basis. Occasionally, one party is given the right to terminate early on 30 or 60 days advance written notice. Make sure the term is long enough so that the time and resources spent on marketing the products and services is justified.
· Marketing. Will there be any specific marketing undertaken to highlight the third party's products or services? The third party may insist upon certain prominence or placement on the site and/or a minimum level of ads or sales.

Credit Card Transaction Fees for Small Businesses

From: smallbusiness.yahoo.com

Every time you process a credit card payment on your small business Web site or at your brick-and-mortar store, you are charged a transaction fee. Transaction fees vary according to your merchant account provider and the guidelines of the card issuer. While the details vary, there are some rough guidelines to how these fees are assessed. By performing some calculations ahead of time, you will be able to estimate how big a bite these fees will take out of your bottom line. Armed with this knowledge, you can adjust your pricing to ensure that you are still making a profit. When you accept credit cards payment, the processor deducts anywhere from 1 to 5 percent as a fee. The majority of this percentage goes to the card issuing company. Some merchant account providers may add their own percentage to this fee, which is why the base rate is not always consistent. If you have less-than perfect-credit, your merchant account percentage will be closer to the higher range.

Some third party merchant processors charge as much as 15 percent of each transaction. These third party accounts are geared towards small businesses that cannot qualify for a merchant account on their own. Since the third party is taking a risk by offering you this account, the percentage is much higher. Each card issuer charges a different percentage rate. Visa and Mastercard usually charge the least, while Discover and American Express typically charge a higher percentage. This is something to consider, not only when setting prices for your products, but also when deciding which cards you are going to accept. Visa and Mastercard are the most popular cards, so it behooves you to accept at least one of these two. It will be up to you to decide whether you need to add American Express and Discover. In addition to the percentage rate, there are also transaction fees. This transaction fee is charged on each and every purchase processed through your merchant account provider, and is typically from $0.25 to $0.50 per transaction. This amount goes directly to the merchant account provider. It may be figured in after the initial percentage is taken off or before this takes place. Read your merchant account agreement carefully to see at what stage this fee is deducted. You may also have a minimum monthly transaction fee. This may require that you process a certain amount of cards or dollar amount each month. Minimum fees are usually around $15 each month. Before you select your merchant account provider, make sure that you completely understand all of the different fees that you will be required to pay. There may be setup fees, gateway fees, penalties, and other fees that will be automatically deducted from your account each month.

A Merchant Account is Crucial

From: forbes.com

Whether you’re a traditional brick-and-mortar business or an Internet start-up, it’s unlikely that you’re able to do business without accepting credit and debit cards from customers as a means of payment. New restrictions on the amount of money that major credit card companies are allowed to charge to merchants who accept debit cards are making it possible for consumers to use their plastic not only for major purchases, but also for everyday banalities like a cup of coffee or a cheeseburger, and credit card use will only become easier and more common as increased security and better technology come into play. Your merchant accounts are your connection to the banks that interface directly with credit card providers, so it’s very important that you maintain a good understanding of credit card processing and the mechanism of merchant accounts.

Expand Your Business with Online Credit Card Processing

From: forbes.com

As a merchant, the only way to remain competitive in today’s market is to maintain a website that supports online credit card processing. With secure servers, automated transactions, and a new system for combating fraudulent transactions, credit card processing has become increasingly accessible. Boiled down to basics, credit card processing software and/or terminals check your customers’ credit card numbers, expiration date, and other pertinent information, then withdraws money from their cards and deposits it directly into your merchant account. Statistics show that online credit card processing can increase your online business revenues anywhere from 50% to 400%, so the time to act is now! Different types of credit card processing software will suit different needs, but most will provide a merchant account for immediate processing, secure and encrypted SSL (Secure Socket Layer) for secure transactions and a web-based terminal from which to access your account. There are three major types of online credit card processing. A virtual terminal allows manual addition of mail and telephone credit card transactions of the type that were used before the Internet existed. The second type, a simple integration method, links your site directly to the credit card and bank system, allowing you to instantly accept transactions over the Internet. Finally, the advanced integration method provides a mechanism for custom-linking your system to more complex systems using a transaction gateway server. The benefits of these various systems include the ability to access all of your information from the internet without making manual transactions impossible, setting up recurring billing cycles, and, most importantly for your business, protecting against fraudulent transactions.

Credit card payments allow you to take advantage of the two types of customers

From: thesitewizard.com

Impulse buyers. After reading your advertisements and hype on your site, buyers would be all fired up about your product. If they have a means of making a purchase immediately, you've secured that sale. If you only allow cheque payments, the additional time it takes for them to get their cheque book and mail out the cheque may be a deterrence. They may also have second thoughts later.

International customers. Credit card processing payment is a tremendous convenience if your customers are overseas. It automatically takes care of the problems of currency differences as well as the time it takes for a cheque to travel to the vendor. You will lose a large number of overseas customers if cheque payment is the only way you can accept payment.

Merchant Services: a benefit for your Business

From: asbhawaii

Merchant Services can mean greater growth for your business. With Merchant Services, you’ll be able to accept most credit cards, including Visa®, MasterCard®, American Express®, JCB®, Discover®, and Diner’s Club® — saving you time and increasing your cash flow.
There’s no need for phone authorizations, enabling you to handle more customer transactions. And by using electronic draft capture (EDC) to authorize and process payments, your deposits will be credited to your Bank Business Checking account, or Analysis Account the next business day.
Our Merchant Services representatives will work with you to structure the credit system that’s right for your business and help you start benefiting from this powerful revenue resource.
Benefits Your Business Will Receive are
Some banks handle all major credit cards and check-guarantee services
Banks also provides customer service assistance available 24-hours-a-day, seven-days-a-week
A potential increase in sales volume, due to the expansion of your customer’s purchasing power
Increased cash flow through the immediate deposit of credit card funds
Some of the banks has latest technology and equipment for credit card processing

Establishing a Merchant Account for Your Web Business

From: inc.com

Many online businesses have had difficulty establishing a "merchant account" - a special type of bank account that holds the proceeds from credit card transactions.Without a merchant account, Web businesses can't accept credit cards and may miss out on more than 60% of their sales opportunities. Here are three of the first steps in establishing a merchant account for your Web business

Determine Your Needs. Before shopping for a "merchant account provider" (MAP), take the time to determine which merchant account features and services you'll need. Two important examples are:

Real-time processing. Some E-commerce systems offer automated transaction processing while the customer waits. Others offer manual processing, which collects payment information for later processing by hand. Real-time processing is more expensive and typically only required in high volume systems or for products distributed electronically, such as documents or software downloads.

Technical compatibilities. Many MAPs offer an entire E-commerce system as part of their service. This system may be incompatible with your current or planned hosting software or other E-commerce applications. Check with each MAP to ensure its software is compatible with your E-commerce system.

Research Merchant Account Providers Don't rush into any MAP service contract without gathering at least five price quotes from prospective MAPs. Also, keep in mind that rates and fees are often negotiable: don't hesitate to push MAPs into a bidding war. Merchant accounts should not be an obstacle to setting up shop on the Internet. With a little research and planning, acquiring a merchant account can be painless and inexpensive. It can also shield you from less-reputable providers seeking to profit from novice Web merchants.

Merchant Service Becomes Increasingly Affordable

By Charlotte Alice
From: ezinearticles.com

As consumers grow more comfortable with purchasing products online, more and more businesses are expanding to provide services and products on the internet. In order to accept payment, these businesses must implement a merchant service solution to process payments. In past year’s merchant services package were very costly, with credit card payment processing systems costing as much as merchant accounts used by physical retail stores. Many smaller businesses simply cannot afford the expenses involved in maintaining these traditional merchant accounts. The good news is that as internet business continues to grow, merchant service packages have become progressively more affordable. What used to cost businesses hundreds of dollars per month, not including individual transaction fees, for basic merchant account services, is now available for a fraction of the cost. In part the lower costs of merchant operation with regard to the processing of payments online are due to improved payment processing software as well as other integration improvements between database information and point of sale websites.
Merchant service accounts for processing online payments have also become highly sought by those taking part in the online auction industry. Cheaper, revolutionized forms of online payment processing have made it possible for even the smallest businesses and individual sellers to accept payments online. There are several popular merchant services provided by internet companies that do not even require the procuring of a traditional merchant account. This means that sellers and businesses can afford to accept online payments because there are no monthly fees. These types of merchant services generally charge a per transaction amount, as well as a percentage of the total bill amount. Usually these same contemporary merchant service solution companies also provide more extensive packages comparable to more traditional merchant accounts. With these extended merchant service packages, clients are able to process additional forms of payment, such as lesser known credit cards, debit cards and online or electronic checks. Additionally, the more comprehensive merchant service packages offered by these affordable internet payment providers allow clients to process credit cards and other forms of payment directly through their websites. In the past, merchant account services similar to this cost anywhere from hundreds to thousands of dollars per month. Now, however, it is possible to secure high-end merchant account payment processing and notification services for much less than one hundred dollars per month. Innovations in these areas of merchant services have made it possible for small business owners to thrive on the internet. There are also usually fees that apply to individual transactions. Many times, providers offer several different packages, such that depending on your volume of sales, you can pay lower per-transaction fees for an increased monthly account fee. Again, it is worth taking the time to compare the different merchant service packages in order to determine the most cost effective plan for your individual business.

Ecommerce Solutions Compared

From: merchantseek.com

There are dozens, perhaps hundreds of businesses and organizations eager to assist you sell your product online. Basically, they fall into four categories: credit card transactions, digital cash transactions, electronic fund transfers and telephone billing systems. No solution is perfect and each comes with its own set of pros and cons. The right choice for you depends upon your specific business requirements.

1. Merchant Internet Accounts.
If you have a merchant status, you will need to consider the following factors:
Pros:
Consumers are familiar with credit cards
With credit card transactions, consumers don’t have to download and install special plug-in. Credit card sales lend itself to impulse buying.
You have the customers' contact information for follow up sales and marketing purposes.

Cons:
Consumers still have concerns regarding providing financial information online.
Not everyone has a credit card.
This method does not lend itself well to the purchase of down loadable soft goods, such as software, art, graphics, etc. Vendors wanting to sell down loadable soft goods will need to find a way to ensure the product is paid for, once downloaded.
You will have to deal with chargebacks.

If you can’t or won’t get a merchant accounts through your regular banking institution, you still have the broker option open to you. Brokers can often arrange merchant accounts for businesses that are deemed high risk. Setup fees and discount fees apply.

2. Electronic Cash Transactions
Electronic money is an arrangement whereby the customer pays for the merchandise using, well, electronic money. As consumers become more comfortable providing credit card information over the Net, these methods are less utilized.

The Pros
No credit card transactions are required.
No concerns re chargebacks.
Lends itself well to micro payments.

Cons
Many people are unfamiliar with the concept and shy away from unknown entities.
The process is perceived as "a hassle" to some shoppers who prefer to simply give credit card information.
Both merchant and customer must be participating in the same scheme before this method of ecom can be used.
Eliminates the possibility of impulse buying, unless both customer and merchant are already in same scheme.
May not be available globally.

3. Electronic Fund Transfers
Funds are transferred electronically from the customer’s bank account to yours. (This is a highly simplified explanation, and is accurate in the most general sort of way. However, the bottom line is that the customer buys, and at some point the funds are removed from his or her account and ultimately deposited into yours.)

The best known method is the issuing of electronic checks. Customers pay for merchandise by writing an electronic check that is transmitted by email, fax or phone. The "check" is a message that contains all of the information that is found on an ordinary check, but it is signed digitally, or indorsed. The digital signature is encoded by encrypting with the customer’s secret key. Upon receipt, the merchant or "payee" may further indorse by encoding with a private key. When the cheque is processed, the resulting message is encoded with the bank’s secret key, thus providing proof of payment.

Pros
No credit card worries.
Available to persons who don’t have credit cards

Cons
A very new technology that some perceive as being less secure than other forms of ecommerce.
Many customers aren’t set up to issue electronic cheques; time required to make the arrangements eliminates impulse buying.
May not be available to international consumers.