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Phone Credit Card Processing Solution - Is it Suitable For You?
By JACOB of Picmoney.com

You know that cashless payments are gaining momentum globally. You understand that you may be even losing customers by keeping your transactions cash-based. You are ready to take the plunge into the realm of payments. You look for a processing solution and suddenly, you are swamped with hundreds of options to choose from. Where do you start? Well, why not from the mobile phone in your palm?

Phone Processing

Yes! You can accept and process your customer's (CC) from your mobile or any phone from any place that you get reception or have a land line connection. Phone processing is one of the latest innovations in this technology and it is sometimes referred to as touch tone processing.

How does it work

All you need to do is to call up your selected system and enter the transaction information as well as the customer's CC details using the keypad of your phone. The system will immediately process the information and either accept or decline the transaction. If accepted, an authorization number will be given to you to be recorded onto a receipt which the customer will then have to sign. Now, how simple is that?



Advantages

Well, the one positive feature that should by now be screaming at you is the SAVINGS! You will save so much on expensive Point-Of-Sale (POS) equipments or software that can set you back by anything between $150 and $1000. All you need is your phone!

This is perfect for you if you are just starting to accept credit cards. It gives you the opportunity to study the volume of sales that your business generates at a low cost. Besides zero equipment cost, this type of processing processing usually comes with low or no start up cost at all. It provides you with a chance to take time to compare the increase in the revenue generated by accepting CC to the cost incurred in CC processing. You can then decide if you should invest in any other CC processing solutions or none at all. Most merchants make the mistake of not comparing the increase in revenue to the costs that would incur and end up suffering huge loses.

You need not be one of them.Besides the zero equipment costs and low start up costs, this type of processing normally does not come with early service termination fees. If you should decide that you would like to switch to another type of phone processor, you may do so without burning any holes in your pocket.There are no monthly minimums and therefore you will not suffer even if you do not make many sales through CC. Free online transaction reporting allows you to keep track of all your credit sales.

Disadvantages

The discount rate and transaction fees are usually higher than other forms of non-card processing solutions. There are basically two reasons for this: Commonly, the merchant service provider employs an external company to process the transactions. The cost of employing another company is then borne by the merchant (you) in the form of higher fees. Non-card transactions are susceptible to higher risk of fraud and therefore, the discount rate is usually much higher.

Do note that despite the higher fees, the low start up costs and the low monthly fixed fees usually make phone processing lucrative.

Is this for you?

Looking at the fore-mentioned advantages, this might just be the one for you if you are a new venture, a small business or new to processing. The low cost will give you the boost that you need to grow. It is also suitable for you if you expect low volume of CC transactions in your business. For example, a professional like a personal masseur or a lawyer may not make many sales in a week.

However, to stay competitive it is important for them to provide their customers with the option of paying with credit cards. It makes much sense for them to use this type of processing which avoids the clutter of expensive and cumbersome processing hardware. So, if you are a solo-professional, phone processing is suitable also for you.

If you are using cell phones, you may be able to accept credit cards on the move without ever having to lug around heavy, troublesome equipment. Hence, if you are in any delivery business (such as pizza or furniture) or if you are a professional mover or taxi driver, this is the solution for you. Last but not least, if you offer temporary sales at different locations, it is obvious that it is perfect for you.

Study your business needs and compare the available merchant service providers. Do not just compare the fees but also their service, technical support and reputation. Read your contracts very carefully (including all fine print) before committing to any. Phone processing could just be your first step to providing your customers with flexible payment options and staying competitive. Good luck!



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