Establishing a merchant account for your business is an ideal way to increase profits and expand your company. It’s also a great way to increase customer retention and attract new clients. While the first step in setting up a merchant account is to identify the account provider that offers the services you need at a price you can afford, it’s also important to have an understanding of the types of equipment or software your company may need to conduct business effectively. Today’s leading merchant account providers keep up to date on all of the trends in processing equipment options, and can be an excellent source of information regarding the specific type of hardware or software you’ll need to get your account up and running. Before speaking with your account representative †or even before beginning your search for a merchant account provider †take some time to review these guidelines detailing some of the most popular hardware and software options that you may need for your merchant account. Point-of-sale (POS) or Swipe Terminals These terminals are familiar sights in many retail establishments today. Usually resting on a countertop or specially designed stand, the POS terminal allows credit cards and other types of cards, such as debit or ATM cards, to be swiped through a special, magnetic slot, reading encrypted credit card information, such as account number and accountholder name, as the card is swiped through. Attached to a dedicated phone line, the information from the terminal is transmitted along with information from the cash register to the credit card issuer, which verifies and validates the card and determines if the transaction may be approved or declined. Swipe terminals are most commonly used at retail establishments †businesses with a physical storefront operation †and because they require a face-to-face transaction, are associated with the lowest incidence of fraud and chargebacks; therefore, they are generally the least expensive type of equipment to obtain. Many terminals today can also be sued for automatic check authorization. Depending upon the features of the terminal you select, you may pay from a few hundred dollars to a thousand dollars or more. Today, merchants can also purchase swipe terminals that attach to mobile devices, such as cell phones or PDAs, allowing credit card transactions to be processed on the road. Virtual Terminals While a POS terminal is an actual, physical piece of hardware, a virtual terminal relies on software to transmit, and process credit card transactions. These terminals rely on a sales person or other company representative to manually enter credit card data for each sale. Companies that select this type of account service often wait until the end of the business day to enter all transactions at one time. Most commonly used in Internet, phone or mail order operations, a virtual terminal can be a good choice for businesses that expect a relatively small volume of business each day. The cost of a virtual terminal can vary widely, based on the account provider, so be sure to shop around to get the best deal for your business. Gateway Provider Sometimes called a weblink, this service is used by Internet businesses that expect a relatively large sales volume, or those that want a truly automated order processing system. The gateway provider allows for real-time processing of credit card transactions, in much the same way that a POS terminal allows for instant acceptance or denial of sales. Like a POS terminal, your gateway provider may also allow the use of gift cards or debit cards. Unlike the virtual terminal, a system using a gateway provider performs transactions automatically, with no need of human intervention. The gateway, or weblink, may also offer services to automatically determine and transfer your daily accounts to your business bank account that is tied to your merchant account. While some merchant account providers offer their own gateway providers, or can point you to a recommended provider, in some cases you may have to select your own provider. If you find yourself in that situation, it is imperative that you select a provider that uses software that is compatible with the software used by your merchant account provider. IVR/Interactive Voice Response Like the gateway or weblink, an IVR system is entirely automated, requiring no human intervention in the processing of credit card orders. IVRs are typically used in telephone ordering, for companies that expect to do a relatively large volume of telephone sales. These systems can be an ideal complement to both retail and Internet businesses that also want to allow customers the option of ordering via the telephone. Most IVR systems also allow touch-tone ordering, and can be used by customers using both conventional land line phones and cell phones. IVR systems typically use voice recognition software to perform transactions. These are among the most common options available to businesses today. However, because merchant services are evolving each day, be sure to ask your account provider about other options that can help your business grow and thrive.
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