Choosing the Right Merchant Account Provider

The following text has been adapted from Fee Sweep. Download your copy of Fee Sweep here.

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© Depositphotos – Anatoly Maslennikov

Picking a provider is not just about which one has the lowest fees. It’s also about picking one that will meet the needs of your business, provides great customer support, and can supply the right hardware, software, or systems your business will need to efficiently process card payments.


Pick Your Poison

The first step to picking a provider will be to understand your own credit card processing needs. Choosing equipment and systems that are designed for your type of business will save you many headaches down the road.

If most of your sales are in-person and the credit card is present during the transaction, you will need to buy some type of equipment that will enable you to swipe your customer’s card. If the card is not physically present and must be typed into a keypad, you will want a service dedicated to card-not-present transactions. If you have an online business, you will want to make it easy for your customers to enter their card information and you will also want strong fraud prevention systems. In many cases you may be able to use the tablets, computers, and smartphones you already own. Below I’ve listed the most common hardware and systems along with the business types they best fit.

Phone Line Card Terminal

Phone line terminals, also called “countertop” terminals are the most common type of equipment used for swiping credit cards. They are the machines that you see at grocery stores and retailers. Although countertop terminals are some of the oldest technologies on the market, they are still the preferred machines for retail type businesses that do a high volume of swiped credit card transactions. The average cost for a new terminal is around $300, but they can often be bought refurbished, or pre-owned, for much cheaper.

Best suited for:

  • Medium to high volume retail businesses that sell low priced items (i.e. convenience stores, liquor stores, grocery stores, gift stores, etc.).
  • Small single register restaurants.

Point-of-Sale (POS) Systems

POS systems are an all-in-one solution that can handle a variety of tasks such as ordering, inventory management, employee tracking, and a variety of other tasks in addition to enabling you to accept card payments. Proprietary POS systems are usually very expensive and require on-going support and maintenance provided by the POS maker.

Best suited for:

  • Franchises.
  • High volume, multi-location business.
  • High volume, high inventory, high order businesses.
  • Businesses that need an all-in-one customizable solution to handle various tasks in addition to taking payments.

Virtual Terminals

Within the last few years, virtual terminals have begun to replace phone line terminals at a rapid pace. Virtual terminals can be used with most computers through an Internet connection and have many advantages over phone line terminals. They are ideal for card-not-present business, but many also include card-readers that can be plugged into a USB port to enable card-present transactions.

Most virtual terminals are user-friendly and offer useful features that cannot be found with a phone line terminal. The best virtual terminals come with features that allow merchants to search transaction history, recharge or refund a card without needing to re-type or re-swipe the card, generate sales reports, export data into accounting software, setup and manage automatic billing, and set multi-user access permissions.

Most virtual terminals are also easy to scale across many locations because the same virtual terminal can be accessed from multiple computers. Separate login IDs can be assigned to each location, or to employees, to make sales tracking easier. A few virtual terminals even have real-time sales reporting. Additionally, a virtual terminal can make a great mobile credit card processing solution when combined with a laptop and global Wi-Fi card.

Best suited for:

  • Businesses that process a low number of medium to high dollar card-present transactions (i.e. jewelry stores, car repair shops, boutique gift stores, recording studios, law offices, medical offices, etc.).
  • Merchants that have repeat customers or memberships (tanning salons, gyms, yoga studios, etc.).
  • Business owners who want easy implementation and ease of use.
  • Businesses that want better sales tracking capabilities.
  • Merchants that need a mobile option and have access to the Internet on location (i.e. trade shows, flea markets, etc.).

Wireless Credit Card Terminal

These machines are just like phone line terminals except that they are mobile and can be used on-the-go. They are usually expensive to buy, bulky, and notorious for getting poor wireless coverage. Rapid developments in smartphone credit card processing technology are quickly making them obsolete; however, your particular mobile needs may make them the best choice for your card processing.

Best suited for:

  • Businesses that do a medium to high volume of mobile sales
  • Merchants that do not have access to smartphones such as the iPhone or Android phones.

Smartphones & Tablets

Smartphones are quickly becoming the preferred option for mobile credit card processing and basic POS systems. Several companies now offer free apps, free card readers, flat processing fees, no annual fees, no monthly fees and no time commitment. Interchange-plus pricing is usually not an option with these providers; however, the lack of additional fees and term commitments makes them attractive to many business owners.

Nearly all card processing apps give the option to email receipts on the spot, and some even include a virtual terminal that will store transaction history and generate reports that can be accessed online. Besides making a great mobile option, these services also make for great a backup option if your primary merchant account goes down. Check out our top mobile credit card processing picks here.

Best suited for:

  • Merchants that have Apple, Android, Windows, or Blackberry devices.
  • New, low volume businesses.
  • Tradeshow/Flea Market/Farmers Market vendors.
  • Businesses owners who want a backup option with no monthly fees.
  • Businesses that want to easily scale wireless processing across an outside sales force.

E-Commerce Payment Gateways

For e-commerce businesses, it is best to work closely with an experienced web developer who can guide you in selecting the right online shopping cart and payment gateway for your needs. Most well-rated merchant account providers can also enable you to accept online payments and there are a few all-in-one services that include everything you need – even the website itself.

The preceding text has been adapted from Fee Sweep. Download your copy of Fee Sweep here.

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Most Ethical Processor of 2024

The most ethical providers offer rock-bottom rates, no monthly fees, no contract, and superb customer support. Below we break them down by specialty and industry:

▶ Retail
▶ Restaurant
▶ Card-Not-Present
▶ Invoicing
▶ Online Checkout
▶ E-Commerce Store Creation
▶ Subscriptions & Recurring
▶ Web Developer Tools
▶ Mobile
▶ Non-Profit
▶ Canadian
▶ Seasonal
▶ Quickbooks Intergration
▶ Free (Zero-Fee) Processing

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