How to Accept Credit Cards as Contractors

By Ryan Bauer

  • Overview

    Accepting credit cards can be difficult for a contractor, since you aren't working out of a storefront with a physical card-processing system. This leads many contractors to not accept credit cards at all; but this isn't a good decision when it comes to your revenue, since many customers intend to pay with a credit card so they can finance the payment over a period of time. If you don't accept credit cards, they may move on to someone who does. The easiest solution for most contractors is to obtain a "merchant account" with a credit-card-processing company that specifically allows them to process transactions over the telephone. The contractor is then able to obtain a customer's credit card, dial a toll-free number and enter the transaction details. The customer's card is then charged, and the contractor's bank account is credited with the funds (minus a small transaction fee).
    • Step 1

      Call up the website of a credit-card processing service like Accept Credit Cards By Phone.com (see Resources). These services offer various types of merchant accounts you can apply for (most of them have to review your company information and current sales volume to approve you for an account). The most affordable arrangement for a contractor is one in which you simply dial in credit-card transactions and obtain the customer's signature on a sales slip. But more elaborate systems do exist, such as mobile processing units that operate off the cellular network. Different companies will charge different fees for transactions, so research several companies before making a decision, to ensure that you get the best rate possible.
    • Step 2

      Wait for approval from the processing service. This may be instant, but you will usually have to wait a day or two to hear back from them while they go over your business details. Once you are approved, you will be entering a monthly contract in which you will pay a flat monthly fee to keep your account open, plus a percentage of each transaction--and sometimes a fixed fee per transaction on top of the percentage.


    • Step 3

      When a customer pays you with a credit card, use any telephone (even a cell phone) to dial the toll-free number. You will be prompted for your account number and password, followed by the transaction total. Finally, the automated system will ask you to enter the customer's card number for processing. There will be a short pause while the hold is placed on the card, and you will be told if the transaction was approved or denied. Finally, write the transaction total on a sales slip and have the customer sign to approve the transaction.
    • Skill: Moderately Easy
    • Warning:
    • Always get the customer's signature. If you fail to do so, the charges could be reversed, and if you have no proof of the authorization, you will be forced to pay the money back to the customer.

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