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Any small business that isn’t conducting itself entirely in cash transactions is going to require the services of a company that does credit card processing. For small businesses, there are a wide variety of merchants to choose from, and in trying to select the right credit card company, you will have to understand the services that the industry provides.

Credit card processing companies provide the necessary physical components (terminals, and the necessary wiring), fraud protection, and online help. Almost all of them also provide the necessary features for online businesses, such as virtual terminals.

Credit card processing companies make their money through fees that are charged for each credit card. Typically, the processing company will keep a little more than two percent of online purchase transactions, and a little less than two percent for retail transactions. This percentage is called the discount rate. Processing companies also levy static transaction fees, which are usually about twenty to twenty-five cents in addition to the discount rate; these are simply charged per transaction, regardless of whether it is $5 or $500. They typically also require a small monthly fee, usually in the amount of $10-$20. For the most part, all of their bread and butter comes from the discount rate.

If you are ready to get set up with a credit card processing company, you will want to look for one that has the highest customer satisfaction at the lowest cost, in both monthly fee and discount rate. If you wish to compare the largest credit card processing companies on your own, you can check out top ten reviews  and compare the strengths and weaknesses of these merchants. Credit card processing for small business is absolutely essential, so it always pays to do your homework!

This Business article was written by Mark Karavan on 11/27/2009