(1) Which credit cards will you accept? Most U.S. banks include MasterCard and VISA in their basic package. Some include Discover/Novus. American Express, Diners Club and Carte Blanche are usually marketed separately. My experience in business-to-business transactions sees American Express cards tipping the scales slightly over MasterCard and VISA, with Discover/Novus a distant third. I've never been asked if I accept Diners Club or Carte Blanche. If you're selling any type of business software, you need American Express merchant status.
(2) Do you want to rent a card swipe machine, or do you want to use PC-based software to transmit your data to the bank? Years ago, bankers seemed much more comfortable with issuing card swipe machines. With a bank-sponsored and -endorsed card swipe box, you have one-stop shopping for resolving anomalies in your account balance. If you use credit card software, you run the risk that the software company and the bank will each blame the other for processing problems, and you'll have more difficulty getting problems solved. Expect to pay a $25 monthly rental for the card swipe box. Software lease prices are roughly the same.
(3) What are the costs? There will be an application fee of about $250, which should include the security deposit on the card swipe box. Make sure your application fee is refundable if they turn you down. Expect to pay about $25 per month (to rent the card swipe machine or to lease the software), plus a percentage of each sale. While it varies by bank, the American Express rate is about 3.75 percent, and the Discover/Novus, MasterCard and VISA rate is about 2.25 percent. To make your life more difficult, the credit card companies post transactions differently: MasterCard and VISA credit your account with the amount of the ticket, and debit your account monthly for fees. Discover/Novus and American Express discount each ticket and credit the discounted amount.
Read your contract carefully. Look out for minimum monthly fees, chargeback fees, voice authorization fees, and processing surcharges.
The biggest cost, though, is the lost opportunity cost that you're paying today. You're losing sales from people who simply won't deal with a company that doesn't welcome credit cards. You're losing sales from people who tell you that they'll mail you their checks, but don't. Sign up for your credit card merchant status today.
