Discount Rates and Fees

• Each time you process a credit card transaction, you will be assessed a fee based on the gross amount you collected. The amount can range from 2 percent to 4 percent depending on the type of transaction and the type of credit card that was processed. For instance, American Express typically charges a higher discount rate than Visa or MasterCard, and you can expect to pay a higher rate when you are taking a credit card over the phone or online vs. obtaining a physical signature from the buyer.
  
  

Additional Costs

• The costs of accepting credit cards do not stop at the discount rate. You can expect to incur additional fees for leasing a terminal for your store, installing a payment gateway for your online shopping cart, monthly statement fees and other administrative costs.
  
  

PCI Compliance

• Merchant account providers and the major credit card companies expect you to protect your customer's credit card account information to cut back on fraud and identity theft. Your merchant account provider may require you to be Payment Card Industry -- PCI -- compliant if you wish to accept credit cards at your store or online. In addition to added costs associated with securing card information, you can also expect a higher administrative burden from implementing new processes and procedures to stay compliant.
  
  

Charge Backs

• When you accept credit cards, you can expect that some customers will dispute the transaction with the card issuer, which results in a charge back. In a charge back, the funds are removed from your bank account. Sometimes, the funds are removed prior to the investigation being complete and you will not be given notice. Charge backs often result from a dissatisfied customer or a customer who does not recognize the name of your business on his statement. You can certainly win many of these disputes with proper documentation and have the funds placed back in your account, but there can be a great deal of paperwork, labor and fees involved.
  
  

Fraud

• Credit card approval technology is getting better at identifying fraudulent transactions, but if you process a fraudulent transaction, you can expect to lose the funds and the merchandise that you sold as part of the transaction. Merchant account providers place the onus on the merchant to identify and prevent fraudulent credit card use.
  
  

Customer Service Issues

• While taking credit cards certainly makes it more convenient for your customers to pay, particularly for online transactions, you can expect some added customer service headaches. In addition to dealing with charge backs and incidents of fraud, the checkout line in your retail store may get held up due to a customer's card being declined. Online, customers who see their card declined often go elsewhere to shop rather than figuring out another way to pay you for their purchase.
  
  

Banking and Accounting

• When you receive cash, you can make the deposit in your account the same business day. Credit card transactions typically take two or three business days to be deposited into your account once the transaction is approved. You will need to pay closer attention to your bank statements to make sure you are accounting for all deposits, refunds and fees.
  
  

Reserve

• As your credit card volume picks up, you can expect your merchant account provider to hold some of your funds in a reserve to be used in the event of charge backs or fraud. While these funds are technically yours, you will not have access to them. Depending on the situation, your merchant provider may give you ample time to build up a reserve.