When opening a new business, an important thing that owners need to think about is which credit cards to accept. Some businesses accept all credit cards, while others accept only one or two. Generally speaking, businesses that accept all credit cards make paying convenient for customers and generate more sales. Customers who do not have a credit card that a business accepts may go elsewhere.
Accepting credit cards generates fees that business owners must pay. When a business opens a merchant account to accept credit cards, the owner can choose which cards to accept. Merchant account fees can include setup fees, monthly account fees, and sometimes an annual fee.
These fees do not increase if a business accepts more types of credit cards. Businesses can generally accept Visa, MasterCard, and Discover and have the option of initiating an American Express account with one application.
The costs associated with different cards vary based on transaction fees and per-item fees. Merchants generally pay credit card processors interchange fees, which are a percentage of each transaction. They may also have to pay a per-item fee to the processor. With debit cards, interchange fees are capped.
Certain cards carry higher fees. Premium cards and cards that offer rewards points charge more in fees. If a business decides to accept a particular type of card, such as Visa, it must accept all cards in that category, regardless of the associated fees.
American Express assesses fees differently. It can charge either a monthly flat fee or a percentage of each transaction. The percentage depends on the type of business and its annual revenues. The fees associated with American Express are generally higher than other cards because American Express is a premium card offered to high-end consumers.
Check with Universal Merchant Solutions to find out how credit card processing can work for you and your small business.