Today’s tough economic situation has been difficult to small business owners all over. Faced with decreasing sales, shrinking customer base, increasing administrative costs, and tighter lending, business owners are trying to find new ways to keep their businesses alive. Operations that have been traditional cash heavy operations-small eateries, bars, etc, are increasingly becoming more accepting of credit cards in an effort to maintain their competitiveness.

Businesses looking to generate more sales and customers can do so through processing credit cards. Due to the numerous benefits that they offer- with flexibility and convenience chiefly among them, many of today’s shoppers prefer to use credit cards when buying goods/services in-stores and online. The easiest and best way to put your business on the road to credit card processing is by acquiring a merchant account.

A merchant account is essentially serves as a bank account that allows a business to accept a payment made via credit or debit card. The first step in setting up a merchant account is figuring out the solution that best suits your business. This should be assessed largely based upon your business model, service/ product mix, and the industry in which you operate.

ISO’s– short for Independent Service Organizations, are third party processors that help businesses set up merchant accounts that are tailored to their business. These accounts are almost always established with a financial institution- typically a bank partnered with the ISO. In a typical transaction, a customer’s credit/debit card is swiped and the requested amount is tested against available funds or a credit limit. From their, the transaction is either accepted or declined.

If accepted, funds are then transferred to the business’s merchant account and then ultimately deposited into a checking account within three business days.

It is vitally important that a merchant account be able to do the following:

1. Process credit/debit cards in real time
2. Issue credits and voids.
3. Transactions are able to be viewed online.

You should make sure that your business’s merchant account is verified and effective secure as to protect you and your customers. For more information on merchant accounts, check out North American Bancard’s website and Wikipedia as both have very good information regarding the topic.

This entry was posted on Tuesday, June 29th, 2010 at 2:22 am and is filed under Merchant Account, Small Business. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.