Understanding Merchant Services for Colorado Small Business Owners

Online or with a physical location, all small businesses need to have a way to accept credit cards. So many consumers use credit cards today that not having a way to accept them hurts your sales revenue and profit – there’s simply no way around it. In order to get the most out of accepting credit cards, though, you need to understand how to select a good merchant service.

What are Merchant Services?

Very simply, merchant services let you process credit card payments. The way that this works depends on whether your business is located online, has a physical location, or both.

No matter where you located, there are merchant services available to you. Focusing your attention on services that are located in Colorado, though, can save you a ton of money and frustration. As a Colorado Small Business owner, you have specific needs that aren’t always addressed by national corporations – but in the end, all merchant services work the same way. They let your customers pay for your products and/or services with a credit card.

Merchant Services vs. Payment Processors

There are essentially two ways that you can accept credit card payments. You can either create a merchant account with someone like a bank, or you can work through a payment processor like PayPal. Pros and cons are inherent to either way you go, so you need to weigh your own situation against the pros and cons of the method.

Payment Processors accept payments for you. Generally, this is the easiest way to go – you don’t have to worry about secure server layers and setting up payment gateways. You don’t have to actually process the payments or try to collect the money. In short, the only things you have to do is set up an account, place payment buttons on your website, and run your business.

So what are the cons? Payment processors usually charge you more than a typical merchant account will. They are in business, and their business is providing you a service – for which they will extract a fee. Definitely spend some time looking at the fees charged if this is the way you decide to go. I mentioned PayPal earlier; personally, this is the payment processor I recommend because they have some serious security measures in place to keep both your and your customer’s money safe, and they don’t charge much in fees. Another con is that you will have to find a way to integrate the processor’s own payment buttons into your website. If you go the PayPal way, they will help you out with doing the buttons – most other processors do not, and you will need to hire a web designer that can do this job for you. Which ultimately brings me to the final con of Payment Processors – with the exception of, yet again, PayPal, there is no way of taking “live” payments. No processor that I’ve found with the exception of PayPal lets you accept credit cards at your place of business, so this could be a big consideration if you don’t do any business online.

Merchant accounts work differently. They are essentially your own account, just like a bank account – and oftentimes will tie into your bank account. Lower fees are charged by merchant accounts, and they will provide you with a way of accepting credit cards at a traditional, person-to-person business.

The major con for merchant accounts is that if you want to use them online, you will need to find a web designer to help you create a ton of things that let you take payments. Really, it can be a big deal and cause more than a few headaches so if you have a web-based business, you might be better off going the route of a payment processor.

In the end, deciding on what type of service you want to use comes down to your business. Many small businesses will be turned down by banks, but service providers and independent sales organizations tend to be more flexible. One person might be more comfortable going through their local bank while another will prefer a credit card processor that offers low rates. Do your research and find a method that is comfortable to you.

Selling with a Merchant Account Online

Even if you’re based in Colorado, you will find a lot of sales opportunity by expanding your business onto the web. To begin processing credit cards online with a merchant account (not a payment processor!) you will need to find someone trained and qualified to help you develop the following:

1.Secure Server with Certification: In techie terms, this amounts to a secure server layer, or SSL, which encrypts your customer’s information to ensure that no one can access the payment other than your merchant account.

2.Order Form: Personal and banking/credit card information is placed into an order form, which picks up from what products/services your customer has ordered. This order form needs to be located on a secure server.

3.Gateway: The actual processing and authorization takes places in the gateway. The gateway acts as a tunnel that gets your customer’s information to your merchant account so that you can actually get paid.

4.Shopping Cart: Don’t confuse the shopping cart with the Order Form. The shopping cart lets your customer choose one or multiple items to purchase, and then takes those items into the Order Form, which then takes the information to the Gateway. A good web designer should be able to tell you what shopping carts are compatible with what gateways.

5.The Account: You can have all of the above stuff, but without your merchant account, it’s going to get you nowhere. You have to establish your merchant account before you can actually receive your money. The merchant account provides access to the other processing pieces so that you can authorize, capture, and settle credit card transactions.

Who Offers Merchant Services in Colorado?

Specialized companies called merchant service providers or payment processors are located throughout Colorado. Another place to start your search in locating a good provider is by starting at the bank – many banks offer their customers payment processing services at very low fees, and this lets you keep everything all in one spot.

Some places to look at (once you’re done with this article, of course) to get going include:

Vectra Bank Colorado – http://www.vectrabank.com/busi_bank_merch_07.html – A well-respected financial institution, this bank works with Trans First, Inc. to provide credit card processing services to Colorado business owners. They offer point of sale equipment and services tailored to the type of business you run, and will allow you to accept both major credit card brands and most debit cards.

First Horizon Merchant Services – http://www.fhms.com – Located in Denver, this service provider offers daily reporting, industry-specific products, and both processing of online (e-commerce) and offline transactions. You can manage your account solely through their website if you like, which makes things extremely easy.

Office On Web – http://www.officeonweb.net/merchantcard.htm – Included in the Colorado Better Business Bureau, this is a business that you can trust. Most of their packages will cost you less than merchant services through the bank, and they offer an extensive Fraud Detection System that will ease your mind considerably.

Finding the best credit card processing option can be overwhelming. Really research your options, talk to local banks and institutions, and take a wander through Colorado’s Small Business Administration website. Make a decision based on what your customers would feel most comfortable with, what you can afford, and what will work well for your business in particular.

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