Retail Management
Payment Processing

Offering Online Credit Card Payments for Your Dance Studio or Other Brick-and-Mortar Business

Published by in Payment Processing

You run a dance school, a recreational soccer league, a small gym. You’re sick of collecting checks and having to hunt people down so you can run their payments through your POS.

Does it seem overly complicated to figure out how to accept online credit card processing for your customers? Not sure how to compare merchant processors so you can begin handling card payments? Or is it possible you are not yet sure whether accepting debit and credit card payments is worth the effort for your business?

Offering Online Credit Card Payments

Let’s take a look at all three of these issues:

  • The decision to accept credit card payments online at all.
  • Understanding how to go about it.
  • Determining which credit card processing provider is the right one for your business.

Offering online payment processing – should I bother?

From what I have seen, it simply isn’t possible in today’s world to stay competitive and grow (or keep) your customer base if you are not able to accept credit cards or debit cards as payment for tuition fees. And if you can offer this service online to your customers, all the better. Here’s why:

1. Credit transactions are now the de facto way to exchange money.

The preferred way to pay for services has changed dramatically in the space of a few years. First, U.S. Census statistics show that electronic transactions tripled from $808 billion in 1990 to $2.4 trillion just 10 years later. Then, between 2006 and 2012, U.S. online credit transactions skyrocketed from $2.8 billion to $4.8 billion, according to these statistics.

Did you catch that change? The major growth was taking place in online transactions, not simply card swipes at the cash register.

By 2010, statistics showed that 75% of cardholders with a mobile phone completed transactions online. And, by 2017, mobile device financial transactions will have tripled again, according to forecasts.

Perhaps you’ve noticed that many people don’t even carry a checkbook with them anymore. Written checks as a means of payment declined by almost 10 percent each year between 2009 to 2012.

To quote Bob Dylan: the times – they are a-changin’.

In an electronic payment world, any small business that doesn’t fully support this form of transaction is losing customers.

2. Accepting payments electronically can help you get new customers

A smart business owner will do everything they can to “grease the skids” for potential new customers. One easy way to do that is to support their preference for paying electronically. As the stats above show, prospective customers will likely prefer to pay tuition fees electronically, and online if at all possible.

As well, the perpetually-connected online consumer of today will often search and compare local dance studios from their browser, and then will immediately register and pay online as well. You don’t want to be the competitor in your market who doesn’t offer this convenience!

You’ll also be losing business to your competitors if you not are doing business around the clock. Sound impossible? Not if your website “sells” your business even when your doors are closed – even while you are asleep! And all the more so if they can go ahead and sign up for classes from their living room after dinner. If your competitors have online registration and payment processing but you don’t, guess which dance studio will get the new customer after hours.

3. Electronic payment processing can save you time and protect your business

Several of the leading online dance school management software providers offer you the ability to manage all your electronic transactions in one place, eliminating the need to keep a separate system for tracking credit card payments – including the risk of storing such private information as customer credit card information at your business. By centrally managing electronic transactions online, you’ll also save time by being able to instantly generate reports regarding which customers are paid up and which are not. Imagine how much time this capability will save you each month.

It’s hardly a stretch to say that you will save at least six hours of labor monthly by letting customers pay tuition fees online. This alone can more than pay for electronic payment transaction fees.

Ok, I’m sold, but how do I go about accepting cards?

Accepting credit and debit cards – a process known as “merchant processing” – can be confusing. Let’s look at some of the terminology and the processes in simplified fashion.

Please note: These tips don’t just apply dance studios. If you’re a small retailer thinking about opening up an eCommerce site on something like WordPress, these are great tips to pay attention to – you’re going to need a payment processor too!

Merchant accounts and gateways

A merchant account is a type of bank account, one that’s sole purpose is to enable your business to accept payments by debit cards or credit cards. Your merchant account defines how you and the merchant account bank process the money that you receive from payment card transactions. Your merchant account provider is essentially floating you money as you process credit transactions, depositing funds into your account from the processed transactions, and automatically deducting all its transaction and account fees.

One component of any merchant account is the electronic “gateway” it uses as a verification tool. Every time your business processes a card payment from a customer, the gateway verifies on the spot whether or not the transaction is safe to accept by electronically contacting your customer’s credit card company and verifying that the card is active, has a sufficient balance available, hasn’t been stolen, and isn’t expired.

What are the credit card processing fees?

The fees you will deal with when processing credit cards include certain fixed and variable costs related to the merchant account and its gateway, as well as credit card interchange fees that are deducted from each payment you receive. Let’s go over these.

Gateway fees can differ significantly between merchant account providers.  One may charge gateway services at fixed monthly costs, while another may have lower monthly fixed fees but add on additional per-item fees. For example, you may find a gateway provider that includes up to 600 transactions for just $29 a month.  Another provider might have a lower initial monthly cost, but charge per item fees that could cause your monthly costs to be $90, or even or more for those same transactions.

As for the merchant account fees, most providers will charge you a monthly fixed management fee around $5 to $10. They may also charge Payment Card Industry compliance fees, typically an additional $5-$10 per month.

There are also fees you’ll pay for every credit transaction, which include a transaction fee, an interchange fee, and discount fees.

The interchange fees will vary with each transaction because they are based on the type of card your customer uses to pay you. As you know, every credit and debit card comes with a different set of features or benefits. The more of these that a card provides, the higher the interchange fee you’ll have deducted from the transaction when the customer uses that card.  These fees are set by the card associations and are the same regardless of which merchant account provider you use.

A run-of-the-mill credit card might have an interchange rate of just 1.79%. Meanwhile, a feature-laden platinum rewards cash-back card might deduct a heftier interchange fee of 2.9%. This basically means there is no way to exactly predict what you will pay in monthly interchange fee.

Each card transaction will also have deducted per-item fees and something called “discount rates.” These costs are set by your merchant account provider. The discount rate is usually between 0.5% and 0.9% of each transaction.

All these fees may seem overwhelming, but here is how it all adds up in a typical credit transaction involving a standard credit card and a $100 purchase.

That $100 transaction might typically have deducted from it:

  • A $2.20 interchange fee
  • A merchant provider’s discount fee of 70 cents
  • And a per-item fee of 15 cents

In this scenario, the transaction would cost you about $3.05 total in transaction fees, leaving you with $96.95.

In general, you can expect to pay somewhere between 2.75% and 4% in fees with each transaction.

How do I choose a merchant account provider?

Focus on these cross-comparison considerations:

  • First, if you already have or are looking to add a dance studio software service, a club management software service or an eCommerce suite, you can often get a good package deal for merchant services as a “bundle.”  Often, you’ll also receive an extra level of customer support and training through your software provider that you wouldn’t normally have access to.  Make sure your software provider offers a feature with their merchant services to store your customers’ credit card information securely, through the gateway (i.e., not on the software provider’s servers and not on your own computer).  
  • If you don’t currently use a full-suite software provider, check with your business bank. They will usually offer merchant accounts for credit card processing.  The ease of working with the bank you are already familiar with may be a worthwhile consideration for you.
  • Check for any hidden fees. Also watch out for high fixed rates.
  • Verify that the merchant account provider is fully Payment Card Industry (PCI) compliant.
  • If looking for a merchant provider outside of what is offered by your current software service, make sure it can be completely integrated with your website before you start discussions.  You don’t want to have to log on to multiple systems just to manage payments. Full integration will save you time – lots of it.
  • Since time is money, don’t get bogged down in splitting hairs between one provider and another. It usually only works out to a difference of just a few dollars per month from one reputable merchant provider to the next. It can be like saving five cents on a gallon of milk by going to a store that is three miles further down the road.  So, be aware of the major differences in fees, but don’t get bogged down in it when you could instead be spending that time more profitably by finding new customers.

One final consideration – You can make the process of selecting a merchant account provider a simple one by choosing the pre-negotiated merchant account that comes with one of the more fully-loaded software providers. They typically have negotiated discounted prices on merchant processing and gateway services. Go with that and you can save yourself the trouble and time of comparison shopping on your own.

Looking for Payment Processing software? Check out Capterra's list of the best Payment Processing software solutions.

About the Author

Jon Koerber

Jon Koerber

For the past 10 years, Jon Koerber has served as president of, an online software service supporting registration, enrollment, and billing management for dance schools, gymnastics, swim, academics and other businesses with recurring classes. Mr. Koerber has been in the IT and online software industry for more than 25 years and lives in the San Francisco Bay area.


Comment by Connor Wrenn on

Hey, thanks for including our online transactions statistics in your article! Wanted to let you know we just restructured the data into category pages. To find the mobile payment data you quoted, you can link to this page:

If you’re busy and don’t have time, the existing page will still live on

-Connor, on behalf of

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