By Paul Edwards
Offering your customers the ability to pay you
with Visa or Mastercard will increase your
business from 10% to 50%, depending on the type of
business and your clientele, according to sources in
the charge card industry.
If you want to offer your customers the ability to
pay for your products with Visa or Mastercard, here
are three avenues:
Even though banks as a general rule are not granting home
businesses merchant status for taking Visa & Mastercard,
try your own bank. They know you as a customer. If your
own bank says "no" to you, some people have been successful
with small independent banks. This is particularly true in
II. SAVING & LOANS, THRIFTS, CREDIT UNIONS
Most people think of banks as THE financial institutions
granting merchant status to companies. But that is not so.
In addition, savings & loans, thrifts and even credit unions
are increasingly offering merchant status. You may find them
more liberal in their attitudes toward home-based businesses.
III. TRADE ASSOCIATIONS
A second alternative is to work through trade associations.
According to forum member Barbara Schanker "trade organizations
will provide this as part of your membership. Of course, there
still is a service charge involved, but they are quicker to
grant the privilege. For example, I am starting a pet supply
business, so related organizations include the Retail Merchants
Association, Direct Marketing Association and others specifically
related to the pet industry."
To find trade associations in your field, check Gale's Encyclopedia of
Associations, available in your library.
IV. CHAMBERS OF COMMERCE
Ask your chamber of commerce for help in securing merchant status.
V. USING COMPANIES THAT SPECIALIZE IN PROVIDING VISA/MASTERCARD
Still another choice is to work with one of the companies that have
moved in as intermediaries where banks have failed to respond to the
needs of home businesses.
Here are three companies that will accept home businesses:
1. Credit Flow:
Voice phone inquiries: Irv Brechner at 201-445-7196.
Mail inquiries: Credit Flow, 3216 N. 3rd St, Phoenix, AZ 85012.
Note: Credit Flow allows its customers to clear transactions
either through an electronic terminal or by using a personal
computer and modem.
Following are comments from a forum member about her experience
with Credit Flow:
"One of the reasons I want to accept Master/Visa is
because I'm publishing a newsletter and I want for people to be
able to *call me* to sign up for a sub (in addition to being able to
send one in).
"Every company I talked to said "no way". Except Credit Flow. I
really like the way they handle this--if you're going to take
orders over the phone, they want a photo of the inside of your home
office just to "prove" to them that you can do business there :-).
Quaint, no? Also, she was the first person who actually *heard* me
say that my market is law firms and she agreed with me that the
number of charge-backs would be minimal. As you probably know,
they charge 3-5% which is *a lot*, but my subscription price is
higher than is necessary (so people will take the publication seriously)."
Note: As of August 2, 1989, members are being told Credit Flow is in
the midst of a 60-day hold on accepting new accounts.
2. Electronic Bankcard Systems
2554 Lincoln Blvd., Suite 1088, Marina Del Rey, CA 90291
After careful screening that includes being an established business and
three trade references, home businesses can get marchant status. However,
some home-based businesses are automatically ruled out. These include
mail order, telemarketing and spa sales. Examples of home-based businesses
that have gotten merchant status are carpet cleaning firms and photographers.
3. Bankcard, Inc. will work with home businesses that meet the following criteria:
o Two years in business at the same address
o Personal and business financial statements
o Making a personal guarantee against losses from fraud
o Submitting a copy of the mail order catalog
o Being located in other than metropolitan Los Angeles,
Houston, Miami and New York
If you meet these criteria, contact:
1233 Sherman Drive
Longmont, CO 80501