In the small business world, there are dozens of reasons why you should accept credit cards. The best reason is that research shows that taking cards will increase the size and the speed of your customers purchases. Carrying cash in today’s society has become less and less attractive, especially when you are travelling. Credit cards are small, accepted virtually everywhere, and you can keep track of your purchases online every day if you choose.
There are several advantages for the small business owner to accept credit cards. Customers using credit cards are more apt to make impulse buys using their cards vs. cash. Cash is harder to spend on impulse buys because of the physical act of handing your cash over to a merchant is very real. Cards are, well, just a card, and the pain does not come till the end of the month. Accepting credit cards will also improve your cash flow. Your merchant processor will fund your account within 2 days of the transaction, where waiting for a check to clear can take up to 10 days. And finally the risks are very low in taking a credit card vs. the dangers of accepting a personal check.
To accept major credit cards from customers, your business must establish merchant status with each of the credit card companies whose cards you want to accept. You’ll probably want to start by applying for merchant status with American Express or Discover. For these cards, all you need to do is contact American Express or Discover directly and fill out an application.
You will want to accept the two big credit card companies, Visa and Mastercard, since these cards are used the most frequently. To do this you will have to apply from a respected merchant services provider to be able to accept these cards and others.
Requirements among banks vary, but one requirement that some banks have is there is a minimum amount of time for how long you have been in business. This does not mean that a new or start up business does not have a chance to be able to process credit cards, but it means, you will have to hunt harder to find a bank that does not have this time requirement.
Some banks many consider a start-up, homebased business or mail order business as “risky” and may deny you merchant status. But the most common reason for denial is simply poor credit. If you look at it from the banks view, this is like applying for a loan. But banks may not be the best option for many businesses hoping to open an account. In today’s economy there are many merchant service providers that work with riskier businesses as well as established businesses. Look online for merchant service providers for these companies and make sure to pick one that shows up as reputable on the internet.