Financial institutions offering credit card services to merchants goes back to the 1930s. These were for specific merchants only, such as department stores or oil company customers. In 1949 Diners Club was started. This card was aimed at affluent travelers who needed to cover expenses while traveling. American Express arrived in 1958, catering to business people. These had to be paid in full every month.
Bank of America began the modern credit card, offering monthly installments over time. Their BANK AMERICARD brand was later renamed VISA.
Merchant card services are an essential part of today's business environment. Financial institutions provide this service so any merchant can allow their customers to pay by credit card, which most prefer doing. There are many differing merchant card service programs available, offering a variety of features and benefits.
There is a list of documents that merchants need when applying for merchant card services. if the merchant has been in business for over a year, financial statements must be provided. If less than a year, or a sole proprietor, income tax returns will be analyzed. Copies of their credit records from the major credit reporting agencies must also be furnished. The institution must be sure the merchant has a record of financial responsibility.
Each merchant must evaluate several offerings among financial institutions to determine which is right for them. It's a good idea to check with the Better Business Bureau before committing to any institution. Make sure the financial institution was never investigated for questionable practices and has not received several complaints. Doing an online search may turn up more information. If any of this raises any red flags, continue searching.
Narrow the choices to a few, preferably with offices in the area, that have a good track record. Take a close look at what they are offering. Read the entire document that must be signed, right down to the fine print. If something seems unclear, ask for an explanation. Each program will have its own set of requirements, features, benefits, and fees, including some that may be unnecessary or even harmful.
Would the merchant be locked into a contract for a specific time span? Would there be penalties to pay if the merchant wants to switch providers? Sometimes the financial institution may outsource the service to an independent payment processor. Particularly with online merchants, the service must be available at all times, and process all debit and credit card transactions.