Setting up to accept credit cards etc. FAQ

[DamnSkippy]

Do you guys think you could post a step by step "tutorial" to setting up to accept payments by credit cards, checks, debt cards etc. using both merchant accounts, paypal type systems and whatever else is available? Then one of the mods could sticky it and it would stop a lot of the newbie questions that get asked over and over. Also include tips and hints and don't leave out the things that seem obvious but put all the info in that someone who has no knowledge of any of this stuff will need to know. Just a whole overview of how it all works and what you need to do and have to be part of the system.Yes I am one of those newbies and I participate in quite a few forums and I know the people that have been around a while get tired of answering the same questions over and over. That is why I posted this instead of asking a bunch of newbie questions.

[Robert]

It depends on what program you use.

For example, if you use Modernbill.com, well in the payment section of the admin, you can specify how to accept Card Credits (ie. Merchant Account, Paypal, 2CheckOut) and just enter the username/password and a little details and it's done.

[noncompare]

Hi, Care to elaborate what particular software/CC-processor you're using?

I've personally only used 3rd-party processors but perhaps the "details" you need posted would differ quite a bit from processor to processor, so their own documentation may be at the top of your list, noting that while there are many "generalized" advice that can be had here, you'll still need to delve into the config specifics for a particular vendor.

As mentioned above, in some cases such as with ModernBill, this can be a snap, but you might use an altogether different system and what fits the MB "size" may not fit all...

[Corey Bryant]

Let's pretend it is a full-fledged merchant account & not a third party processor.

Check out the processing rates. For an internet account, is it usually 2.25-2.35%. This means, for every $100 that your consumers spend, you will pay $2.25-$2.35 to the processor. Most also have a monthly minimum, usually $25.00. So as long as you are processing over $1,000 a month, you do not need to worry about this.

And then you have a transaction fee - usually .25-.35 to access the gateway. And then you have a monthly gateway fee, usually $10-$15 a month.

Some places charge for a statement fee. $10 is the going rate. But some offer online statement services for free.

Some charge a customer service fee $10-$20 a month.

So just using the above numbers, your monthly costs could be about your costs could range from about $45.00-$70.00 to have access to customers who want to pay by credit card in "regular fees".

The higher amount that you do process, the lower your discount rate will be. It can sometimes be under 2% if your volume is really high.

Also, if when you submit your site to Visa/Mastercard, make sure that it has your DBA on there. Otherwise, this will slow the process. You can have more than one website with the same merchant account as long as you have that DBA listed. You also need to have that DBA listed on the payment page. Some companies will tell you that you need a merchant account for each website. If they do - hang up & find another one. They are only trying to get more money into their pocket.

Also your bank account needs to have this DBA on it as well.

Your third party processors are going to be a bit more expensive & most will hold your money for about a week. If you can live with that, go for it. Plus their name will appear on the CC statement of your consumers, not your DBA.

Always ask about all the charges that are going to be incurred. If they do not have a charge listed & tell you about it, do not use them. They are hiding something.

If they tell you that you need a 25% rolling reserve for 6 months, locate another processor. They are all different & depending on what you are selling, some processors require a rolling reserver. And if your profit margin is less than 25%, you can kiss that good-bye for 6 months.

[DamnSkippy]

Thanks for the info guys!

noncompare, I am not using any software at the moment, though the host I am thinking of switching to uses H-Sphere with integrated billing etc. I was looking for a more generic but with some details on how all the pieces fit together kinda thing. Like, what is a third part processor and how do they fit in the big picture?

Corey Bryant, Great info there! One question, what is a DBA, is that your "Doing Business Ass"?

Also it would be great to have a list of steps you have to take. Like if you are going to accept credit cards without using a third part processor (explained above) first you need to do this, then this. And it seems only certain banks work with certain processors so you can not just pick a local bank correct? How do all these different companies work together, who does what?

I am not lazy I have found some of this out but the purpose of this post was not only for my benefit as stated in my original post.

[Corey Bryant]

Close - DBA - Doing Business As. Have to watch some of those typos. :D

Well let's presume it is an internet account. You have to have your site up & running so it can be reviewed. And you have to have a bank account so your money can be deposited.

You can pick a local bank to process your CCs. Some prefer this - especially in a small town - keep the business there. But a lot of abnks do not offer customer service after hours. So you need to make sure - is that something that you might need on a Sunday afternoon at 3:00 p.m.?

You have the processor & then the gateway. The gateway will transmit the CC info/charges to Visa/Mastercard for approval. And then that will return a value - accepted or declined. Visa/Mastercard handles that part.

Shope around for what you think is the best deal. Check all the prices. If they are asking for:

application fee
set up fee
reprogramming fee
annual fee
membership fee (some have a membership fee that gives you free CC slips, upgrades, etc which is different)
watts fee

Keep shopping around.