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How to become a credit card processor

how to become a credit card processor

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Confirm the type of business that will be accepting credit cards. If you seek to accept credit cards for limited home-based sales, such as a garage sale, use Square. Square allows anyone with an iPhone, iPad or Android phone to accept credit card payments. The Square swipe mechanism plugs into the headphone jack of your device and is free. Sales can be tracked online. The fee for use is 2.75 percent per transaction plus 15 cents for card swipes. No monthly minimums apply.

Determine what credit cards you prefer to accept. Discover, Visa and Mastercard require that merchants go through an acquirer, such as your bank, to accept cards. An acquirer is an intermediary licensed to authorize credit cards on behalf of the credit card issuer. The acquirer approves the merchant application, sets contract terms, and provides a swipe terminal to process cards. American Express allows merchants to submit an application on their website to accept credit card transactions.

Prepare a list of two or three references to provide for a background check. A background check and credit report are required to confirm that your business is legitimate before you can process credit cards from home.

Prepare documents reflecting monthly sales volumes and chargebacks to present to the acquirer upon request. Monthly sales

volumes determine volume discount rates per transaction. The number of returns is requested by some acquirers to determine the risk level for chargebacks with your business.

Call your bank. Ask what steps are necessary for the bank to become your credit card acquirer. Some banks do not act as an acquirer for any merchant, while others do so only for merchants with high credit ratings. If your bank is unable to act as your acquirer, research which acquirers major credit card companies use. Request that all application materials be sent to your home if possible.

Contact a dedicated third party or independent processor. Several third-party processors can be found online, including U.S. Merchant Systems. Online applications for these routes are easy to submit. Simply click the option to select credit cards. Click the option to accept cards as a retail business. Click the online application button. Enter data required in entry fields. Send the information. An email or a phone call will follow from the company to request sales data and references.

Compare cancellation, setup and monthly minimum fees from the third party provider or acquirer. Compare how long it takes for the acquirer to transfer funds to your account. Review terminal options and fees.

Review contracts and sign the best one. Your point-of-sale terminal should arrive by mail.

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