In the old days getting a merchant account so that you could process credit cards was a colossal hassle. Generally you were expected to have great credit and have an established brick and mortar business. If you were a home based business or, God forbid, you were trying to do business online your chances of getting approved were nil.



Happily, as ecommerce on the Internet has matured it has become increasingly easier to set up pc based credit card processing. This article is intended to communicate three important tips for setting up pc based credit card processing in your business. By the way, even if you run a brick and mortar business it is advantageous to set up pc based credit card processing for the simple reason that with it set up this way you can do business anywhere in the world you have an Internet connection.

Tip Number 1

Choose a processing company that is sensitive to the needs and structure of your business. For example, if you are running an Internet based business make sure the company understands the nuances of doing business online. A good way to determine this is to ask the company about the percentages of their merchants who have this type of model. Beware if they quote you a percentage less than 50%. The rationale here is if the majority of their business comes through similarly situated merchants it reasonable to infer that they are a good choice.

Hint: Are you doing business with them online through their website or are you talking to an officer at your corner bank? The lesson is you might want set up your merchant account through a credit card processor that looks like your own business. If you're online go to a processor that is doing business online. Conversely, if you are brick and mortar you may want to do business with a brick and mortar processor like your corner bank. Chances are good that they both will have options for pc based credit card processing.

Tip Number 2

Always do business with a PC based credit card processor who does their own processing and whose underwriting department is onsite. The vast majority of credit card processors, online or off, are resellers or ?third party? processors. Stay away from them! There are a couple reasons why.

First, processing fees will almost always be higher by setting up with a reseller. Second, and more importantly, using a reseller you are much more likely to have your funds frozen if there are ever any perceived problems with your account.

Here' the horror that could happen if you don't choose your pc based credit card processor wisely. You could have a charge back or transaction over your stated daily transaction amount (you provide this when your account is initially set up). In either case, it could raise a red flag for possible fraud in the underwriting department of the company actually processing your transactions (not the third party reseller) and cause your account to be shut down and funds frozen.

As an attorney I have represented businesses where this exact thing has happened and $1,000's were frozen. It took time and money in legal fees to finally resolve the dispute and only because I threatened litigation.

Case in point: when you do business directly with a pc based credit card processor who is actually doing the processing and the underwriting (fraud detection) department is onsite there is easier communication and a far lesser probability that your funds will ever be frozen.

Tip Number 3

Always ask for as high of a daily sales volume as the pc based credit card processor will allow you when you set up you account.

Several of the businesses I have represented had a problem with underwriting departments (see Tip Number 2 above) because they set their average daily transaction volume too low. What happens is sometimes your business will grow very quickly and you'll start processing transaction over the limit of the average daily volume that you initially stated which will raise a red flag with the underwriting department and possibly lead to having your funds frozen.

The solution is to set your limit as high as possible in the beginning and then communicate with the underwriting department before you reach the daily limit. This way your limit can be adjusted upward and shouldn't have problems.