How to get a Merchant Credit Card Account


Pet sitters are now using PayPal for receiving payments. The advantages of using PayPal is that using PayPal doesn't require any initial outlay of funds or equipment and the payment is secure with virtually no chance of fraud.You must also set up a commercial account with PayPal. The discount rate is 3.5% (about the same as regular credit cards) and PayPal takes their discount right off the top before funds are sent to your account so you won't have any surprises at the end of the month. There are also no reoccurring fees with PayPal as there is with traditional credit card processors.

If the customer has a PayPal account you can either request payment from his account or he can send you the funds via the PayPal web site. Payments made through the web site can cause delays and these delays can be great because customers will not necessarily pay on time or don't have the funds already in their PayPal account. If funds are in their account or their account is directly tied to a debit/credit card, then you will get your money immediately. If the customer doesn't have a PayPal account or if direct funding isn't available, then funding to you may take up to a week.

PayPal now offers a free card swiper and "app" called "PayPal Here" that works with IPhones and Android phones and tablets. You MUST have a PayPal commercial account to use the app. If you already have a commercial account that has been active for at least 90 days, you should qualify for "PayPal Here." The discount rate is 2.5% for swiped cards and 3.5% plus $.30 per transaction for keyed transactions. You can also accept any card including Amex and Discover. You will receive the customer's funds in your PayPal account instantly, less PayPal's fees. This is why I recommend using the phone app. The small discount is well worth it to get your money instantly. PayPal also offers a "Virtual Terminal" which is a program that you install on your computer and it operates just like a credit card terminal. The discount rate is better than "PayPal Here," but there is a $30/mo fee to use this program.

Since transfering your funds to your bank account can take up to 5 business days, much longer than conventional credit card processing, I recommend getting the free PayPal debit card which is only available on commercial accounts. You can use it just like any other debit card for any purchase and take cash back if you need funds out of your account. You can access your funds instantly, instead of transfering funds to your bank account, make purchases or use it at any ATM. However, ATM transactions do incur a 1$ transaction fee, so use the card for purchases and get a cash-back at the same time thus avoiding ATM fees. PayPal also gives you a 1% return on all your purchases with their debit card when you use it as a credit card by signing instead of using your PIN. It can take up to 2 weeks to get a PayPal commercial account set up and another 2 weeks to get the debit card, so plan ahead. Contact PayPal at for more information.

NOTE: I have recently discontinued my traditional credit card processing through "First Data" as their fees have skyrocketed. I now use PayPal and PayPal Here exclusively to take plastic.


A company that has recently entered the market is "PayAnywhere". I have discovered that PayAnywhere has had many, many reports of problems. They have withheld funds up to 180 days, requested additional paperwork from new merchants, and basically been very difficult to deal with. There are many BBB bad reports (rated F) about them and have been investigated by several States Attorney Generals. I do not recommend using PayAnywhere.

I have no real information about "Square" but I do know that it is very similar to using a traditional credit card processing terminal with the same delays in getting your funds into your bank account. A free debit card is not available with "Square".


Taking credit cards with a traditional terminal can be a bit daunting and the requirements are much tighter because you are now being treated like a "brick and morter" location. I offer this information for those that still want to accept cards with a traditional terminal.


First, you have to be persistent. Many banks will not allow "home based" businesses to get a merchant account because they have been burned so bad in the past by these type of businesses. You may have to go from bank to bank. Some credit unions also set up merchant accounts as does Costco and Sams Club. You may have to find a financial institution that is hungry and looking for merchant accounts.

To qualify you have to have an actual office. You can't be running your business from the kitchen table or a corner of the bedroom. You will be inspected as this is required by the credit card company. You also have to have been in business over 1 year or they won't even talk to you. This is your first priority. They will need a basic financial statement, credit report, and estimated average of charges on a per charge and per month basis. Your personal credit rating is the most important factor, so don't be surprised if you are turned down, over and over if your credit rating isn't good. This is where incorporating can help you as your personal credit isn't as important as the corporation's credit.


Your financial institution will require that you either purchase or lease a terminal and printer. New terminals run between $325 and $600 and all units today have a built-in printer. Wireless equipment usually starts at $1000 and runs up to around $2000. Wireless coverage for these units can be very spotty so I recommend a conventional wired unit located in your office. Used and reconditioned equipment can be purchased for as little as $50. Check out businesses that are closing. You can often get fantastic deals on terminal equipment from them. The credit card industry no longer uses manual "imprinters" except as a backup system. All advertising and startup supplies are given to you by your merchant services company. You should not have to purchase anything except the terminal. If you process the client's credit card at their home, you may want to call the authorization center and get an authorization number right then or you can run the credit card when you return to your office. However, there is usually an added fee by the processor to do this. The credit card companies will NOT accept any charge today without an authorization number. This is for fraud protection. merchant services companies now have software for a PC so that you don't have to purchase a terminal. This would allow you to process charges from a lap top connected to the Internet. This software runs around $400, so you may want to just purchase a terminal. You can also purchase a terminal that will also connect directly to the Internet via your DSL/cable router. This can save you a few bucks on fees because you won't be dialing in and the processing time is much faster. Quickbooks also offers credit card processing.


Funds from credit/debit card transactions are transfered electronically from the customer's account to your checking account daily when you "batch" the daily transactions with your terminal. This eliminates running to the bank to deposit card transactions. The deposit will usually hit your account within 2 business days after you transmit your batch. The discount rate (normally ranging from 1.5% to over 4%) will vary depending on the volume of business and your credit card processor. This discount rate, transaction fees ($.10 to $.25 per transaction), and any other fees are deducted once a month from the bank account that the funds are transfered into so be sure to keep enough funds in your bank account to cover these fees. You can lose your merchant account if their fees bounce from your bank account.


Do not even answer the ads for "Take Credit Cards for Your Home Business" as most of these are scams and a total rip-off. They will try to get you to pay upwards of $1000 or even more for the same thing you can get for a modest charge in your local area by just being persistent. Most credit card processors will charge a one-time setup fee, but this is negotiable and may be waived in some instances. Also, do not even talk to telemarketers that promise to get you a better rate. These are scam artists and you will be very sorry you even talked to them.


Most merchant services packages now include Visa/Master Card, Discover, and American Express within the paperwork. In these cases, you will be able to take all these credit cards by only filling out one simple form. The merchant services representative can answer all your questions. If the merchant service company you are talking to doesn't offer a complete credit card package, you can contact First Data Merchant Services (1877-277-3331) and a local representative will contact you to get set up.

If you follow these simple steps, you too can take "plastic".

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Updated 1/30/15