Merchant Account Options for Small Businesses

by Doug Sleeter, Contributing Writer/Columnist
Created:

Over the past several decades, credit card usage has grown steadily, both in the number of transactions and the dollar volume.


Once you’re set up, you should be able to start accepting credit cards within a week or so from your application date.

If your business is unable to qualify for a merchant account, or if you just don’t want to, there are still several ways of accepting credit cards without a merchant account. The fees are higher, but if only a small number of sales are by credit card, you might not really need to set up your own merchant account. In that case, there are several options including Google Checkout (www.google.com), PayPal (www.paypal.com), or Square (www.squareup.com).

Handling Credit Card Transactions in the Accounting System

In my January 2012 column (www.CPAPracticeAdvisor.com/10452665), I introduced the concept of “Lego Mastery.” The process of integrating eCommerce shopping carts and merchant accounts into the accounting system is a perfect example of why accountants and consultants need to develop Lego mastery skills that prepare us to identify the right pieces of the (“chunkified”) business processes and connect them together to make a cohesive, efficient system for the business.

Dealing with credit card payments from customers requires additional setup, workflows, and reconciliation steps for the bookkeeper. Depending on which merchant account you select, you’ll add different steps to the bookkeeping work flow. For example, if you use QuickBooks, and you use the Intuit Merchant Service for QuickBooks, you’ll experience a fairly streamlined process for the bookkeeper that is well-integrated from the Sales Receipts or Payment transactions all the way through to the bank deposits and bank reconciliation. However, if you have a Web Store shopping cart that is not compatible with Intuit’s gateway, you may have separate workflows for phone orders and Web store orders.

Similarly, if you use Peachtree and Sage Payment Solutions, you’ll experience streamlined processing of credit cards and deposits in Peachtree. And of course, integrating non-Sage Payment gateways may also present workflow challenges for the bookkeeper.

The issue of separate workflows for phone vs. Web store orders, and the use of gateways not directly integrated with the accounting software could cause a significant challenge for your staff, so by all means, look deeply at this issue before selecting your Web Store shopping cart solution and your payment gateway.

No matter which merchant solution you decide to go with, adding credit card payment options for your customers should result in a dramatic increase in customer satisfaction, reduced accounts receivable balances, and increased revenues. Even if you don’t get your own merchant account, it’s worth finding the right solution that makes it possible for customers to pay you by credit card.

If you’re concerned about the costs of a merchant account, note that it is a very competitive marketplace so check out the merchant account providers’ websites. Each business has different needs and by researching carefully, you should be able to find a great solution at a reasonable cost.

Here is a short list of Payment Gateways and Merchant Processors to help you begin your research:

Most Popular