WebReserv User Guide

Credit cards

Credit cards

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Credit cards

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Many businesses require a credit card to reserve a product or service. The reason is simple; credit cards allow the business to receive the payment right away. In most cases, the booking process is automated and will not even allow a booking to take place unless the customer provides a valid credit card.


Since credit card payments can be automated, businesses with many bookings tend to prefer this payment type. Another benefit of credit card payments is that many online booking systems keep the credit card on file. By keeping the credit card on file, the business can charge remaining outstanding deposits to the same card.


In order to process credit card payments, you must set up a merchant account for your business. The merchant account functions as a connection between the credit card companies and your bank account. Many banks provide this service, but specialized merchant account providers (also called ISO’s) may offer better terms and are typically more familiar with online payments and credit card terminals.


The one drawback with credit card payments is the cost. It is common to pay $25-$30 per month just for having the merchant account, whether you use it or not. In addition to the monthly fee for the merchant account, you will be paying a transaction fee for each transaction. The transaction fee may either be a percentage of the amount or a percentage of the amount plus a fixed fee per transaction, typically $0.30.


The transaction percentage, often called the discount rate, depends on the merchant account provider, your industry and your sales volume among other factors. It is common to have transaction fees around 2.5% - 3.5% of the total sale.


It can be worthwhile to shop around between different merchant account providers to find the best option (low transaction cost and monthly fee). However, bear in mind that you also want to use a merchant account provider or bank that understands your business and online transactions. You also want to make sure that your merchant account is compatible with your online booking system.