Want To Accept Credit Cards?

Most Canadian businesses that deal with consumers (B2C) investigate accepting credit cards. To most small business owners, the language of credit cards is very difficult to understand…not to mention the fees involved.

To accept credit cards you will need to open a merchant account with a credit card processing service. Your bank is almost certainly involved with one of the large payment processing companies, but in most cases, you are free to choose your own service provider. There are numerous fees that you will be charged, so be prepared with a list of questions to ask the company that you interview.

That’s right; interview! You are the buyer and they are the seller (provider) of the service. You are in the driver’s seat, so ask questions until you are satisfied.

The first question is always, “What’s the rate?” You want to know the base rate for “Qualified Transactions.” This is often a percentage of the amount charged, plus a specific transaction fee. Then, add the credit card company “Assessment Fee”. If you will not be swiping the card, there will be an additional “Non Qualified Transaction or Card Holder Not Present” fee. If the card is a “Premium” card, you will be charged an additional “Premium Card” fee. By the way, you won’t know if it’s classified as a “Premium” card until the credit card company bills you! Ask the sales person if there are any other fees payable on individual transactions.

There is almost certainly a monthly fee for using either a POS (Point of Sale) terminal or even for using your own computer or phone as a method of submitting the credit card information. You will, of course, have to pay for any equipment that the company provides. You will also be charged a monthly “Administration” fee. Ask if there are any other monthly or annual fees.

There will probably be a minimum monthly charge for transaction fees, and this minimum fee will be payable for each type of credit card that you accept…Visa, MasterCard or American Express. Find out the length of the contract and make sure that you have a written record of every type of cancellation fee that may be payable.

You will usually pay an application fee, just to be considered for a merchant account and you will have to pass a credit check and possibly submit financial statements and maybe a business plan. The whole process from start to finish could easily take a month, so planning, like timing is really important. Make sure that your business plan timetable allows sufficient time for you to apply and be approved and set up for a merchant account.