Should Stock Photo Business Customer Pay by Credit Card?

by : Smith & Chen

To accept credit card payments you need to set up a "Merchant Account." This is a credit card processing account that you establish, that makes it possible for you (your photography business) to accept all major credit cards for payment. This account is not the same as your checking account or savings account, but it allows you to accept credit card payments from your customers, and for the money to get deposited into your existing bank account.


There are two types of accounts a merchant can use. Unless you are a brick-and-mortar studio or stock photo agency, you probably won't be interested in the first type, which is the over-the-counter type of account, where the credit card is physically swiped through a machine at the time of purchase.

The account that likely would fit you best is the Mail-Order/Telephone Order merchant account. Your client, photobuyer or print order customer, enters their credit card information onto a form on a website, or by email, or by phone. You then process the merchant account transaction, which goes to a verification provider. Once the card is verified and approved (done electronically), your client's payment is deposited into your bank account.

Can you afford to accept credit card payments? Some banks may charge you an annual fee in addition to a 'per transaction fee' -- but there are many other providers that charge only a small percentage of the sale amount at each transaction, when you process a credit card (you pay an average of 2-3% per transaction to such a merchant account provider). These merchant account providers are ideal for small business owners and online businesses that may need to process only a handful of sales each week.

There are several credit card processing providers to choose from, each offering different features and fees. Figuring which one of these would work best for you, to process your customer's credit card payments, can be a daunting task.

A local bank, because they are not familiar with the stock photo industry, may deny your business application for a merchant account because they don't want to take the risk. Most small businesses end up going through third party providers who are willing to take the risk, and actually get the merchant account on your behalf; then apply their own rate structure to your transactions.

To move ahead with your merchant account, you'll need a shopping cart program of some kind, which must work with the system you use to process credit cards online. Unfortunately, if you go with a third party shopping cart rather than a custom written one, it may not work with all credit card processing gateways. Be sure that whatever shopping cart program you use on your website, works with the merchant account you ultimately end up using to process customer payments.

What's the charge to get involved? You pay fees to the third party merchant account provider (or the bank if you are able to secure your own account directly with a bank that provides it) in exchange for the ability to accept credit card payments. The fees and rates you pay will vary depending on many factors, including how long you've been in business, the type of business you operate, your credit score, how much of your sales are processed by phone versus online, and the amount of credit card sales you process each month.

As mentioned, some providers charge an annual fee in addition to a fee per transaction, while other providers charge only a percentage of each transaction processed. Typical rates for small businesses accepting phone and mail order payments are $0.10 to $0.30 per transaction, plus 2 to 3% of the transaction amount. If the merchant account provider you are considering wants to charge more than this percentage, be sure to check out a few others to see if you can get a lower rate. Sometimes, your credit rating will result in your having to pay higher fees -- but it's worth shopping around a little to see if you can get a lower percentage rate per transaction.

When you're shopping companies, looking for the best merchant account provider, make sure to compare all of the fees to see how much you're going to end up spending per each sale. You should also take into consideration what the application fee is (if any), how much you pay annually, how much you must spend on equipment needed to set up your account (in case you need a swiping machine), and whether or not you must maintain a monthly minimum of sales volume.


If you sign up for a merchant account with your local bank, you'll be able to make direct deposits into your business account at the bank. If you outsource, study the terms for cancellation and under what conditions the provider can cancel your account, as well. Compare how each merchant account provider allows you to withdraw your money -- can you do it whenever you want or do you have to do it at specific times of the month or year? How long will it take to receive your funds once you've requested a withdrawal or transfer of the money? How does the provider handle charge-backs? Read all of the forms and contracts associated with the merchant account before you sign anything.

The process for applying for a merchant account varies depending on the company. For example, some providers ask you to provide a photo of your driver's license, and even of your home office or studio to verify you are in the location you say that you are. Some companies will want to send a representative to photograph your place of business. Occasionally, you'll be asked to provide a DBA ("Doing Business As") or business license, your tax returns, and profit and loss statements.

In our own case, here at PhotoSource International, about five years ago we did our homework and contacted a half a dozen providers. We determined that Total Merchant Services would be best for us. They have been consistent and quick, and I can highly recommend them. If you're interested in checking them out: