04/27/2023
How to Accept Credit Card Payments: A Beginner’s Guide
You know your business needs to accept credit cards. So how can your business accept them?
Most consumers expect that every business will accept credit and debit cards – a standard you are all too familiar with if you must repeatedly explain to customers that your business accepts cash only. Luckily, accepting credit and debit cards is as easy as partnering with a credit card processing company.
This guide will walk you through the ins and outs of the credit card processing industry and highlight the factors you need to consider when choosing a processor.
How do you accept credit card payments for your small business?
Accepting credit and debit cards begins with selecting a processor, followed by considering which piece of payment technology you’ll utilize to accept payments.
1. Determine the type of processor you need.
Choosing the type of credit card processor you want to work with comes down to what you value from this type of company. PayPal and Square, for example, show that they are great for businesses that are just starting out and process a low transaction volume, thanks to their lack of fees. Because their credit card processing rates are higher than those of other options, though, they’re not always a cost-effective choice for high-volume businesses.
When choosing a processor, consider what you value, such as rates, service, and technology.
• Competitive rates: Don’t always look for the lowest rate possible. Some advertised rates are deceptively low, as they only apply to a certain type of transaction. Many companies also charge various monthly and annual fees that you need to consider when comparing costs.
• Knowledgeable and available customer service: If your payment technology stops working during peak business hours, what are you going to do? What is the backup plan for processing cards? How will it get fixed, and how can your processor’s customer service be reached? You can’t afford to have any downtime, so you need a processor that can support you and be there when you need them.
• Fast, secure and reliable payment equipment: There is a plethora of payment equipment on the market, but not every processor offers every kind. A processor can help you decide which equipment is best for your business.
FYI
Different types of businesses tend to use different types of equipment. As an example, typically, restaurants favor top point-of-sale systems and retail businesses favor payment terminals.
2. Consider how you will accept credit cards.
When you begin accepting credit cards, it’s generally because your customers prefer using them or because doing so makes accounting easier. So, it’s important to consider how your customers use their cards. If the vast majority come into your physical location and swipe their cards, perhaps that’s the only method you need to accept. However, you might also want to accept credit cards online, over the phone, on a mobile device or across multiple channels. Determining the methods of payments you will accept can help you understand what type of credit card processing equipment you need.
The COVID-19 pandemic made it essential for merchants to have a card reader with near-field communication (NFC) technology that can accept contactless payments such as Apple Pay, Google Pay, and contactless credit cards. Consumers don’t want to touch payment technology; they want the convenience of tapping their card or phone on a payment terminal, then being on their way. NFC payments also make checkout faster, are easy to implement, and can help deepen consumer engagement.
3. Examine pricing models and fee structures.
Pricing models and fee structures vary greatly by processor, so this is one of the more arduous parts of the buying journey. There are multiple pricing models available that determine the rates you will pay on certain transaction types. Most processors charge 2% to 4% of the transaction value, plus a small transaction fee based on your monthly processing volume, average ticket size, industry and processing history. In addition, processors often charge several fees.
4. Compare quotes.
Using the criteria above, narrow your list of candidates down to three. Then, contact each of these three credit card processors to request a quote. A processor’s rates are negotiable sometimes, so don’t be afraid to haggle – especially if you’ve already received estimates from other companies.
After comparing quotes, request a contract from one or two companies that offer the most competitive rates. However, keep in mind that the lowest rate is not always best. Consider what else each company offers to add value to your service.
Do not complete an application until you are ready to sign up with a company. If you read the fine print, you’ll discover that the application is part of the contract, and by signing it, you’ve agreed to accept the company’s services.
5. Review contracts.
As always, review these contracts very carefully – some companies try to hide fees. If something does not look right to you, ask about it. Consider whether the contract includes automatic renewal clauses, early termination fees and other binding clauses. Once you are satisfied that the contract is fair, sign with the company you believe is the best fit for your business.
Once you’ve completed these steps and decided which credit card processor you’d like to partner with, you are ready to apply. Generally, applications can be submitted online and take two days for the processor to review.
Once your application is approved, the processor will set up your account and walk you through the process of selecting any hardware you might need. Once the hardware arrives, the processor will help you set it up and test it.
Looking for the right credit card processor for your business?
Premier Payment Solutions Is here to help you and your business.
