How to accept credit card payments – UDARIYAN

How to Accept Credit Card Payments

We recommend you follow our blog to learn how to accept credit card payments. If you’re just getting started in your business, accepting credit card payments could make it faster and easier for customers to pay for their products. There are a lot of options when it comes to how and where you accept these forms of payment, but no matter what option you choose, we will help you through the process so you can get back to focusing on running your business. Accepting credit cards at a retail location is quick, easy, and extremely simple for more info about credit card payments without waiting any longer visit our site.

You will be set up with a checkout terminal quickly and it doesn’t cost anything to accept different types of credit cards. Unlike swiping a credit card at an ATM or gas station, there is minimal paperwork as well as security measures already in place.

Find a credit card processing provider for your small business

Consider the proportions by which you’ll process certain types of payment. This could be done in an in-person transaction, an online transaction, or a phone transaction for example. Also, think about what kind of credit cards you’ll accept.

Visa and Mastercard for instance. Processing fees vary between different types of processing and different kinds of cards like one might see American Express cards and so on. One has to find a provider who offers the lowest fees for this type of processing activity as they will depend greatly on the number of transactions processed over time, along with any other accepted card types.

How to Accept Credit Card Payments

Open a merchant account

After choosing your credit card processor, set up a merchant account with them. Merchant accounts are typically established by first associating an existing business bank account to that company’s name or through an online money-transfer provider like PayPal.

Set up payment terminals

The first step in setting up an e-commerce business is by acquiring customers. This can be done by good marketing and advertising campaigns, appealing products, and a running customer loyalty program.

Acquiring clients is expensive in the e-commerce space because of the high cost of getting traffic to your site or building brand awareness or authenticity. 

 

Decide How You’ll Accept Credit Card Payments

Decide How You’ll Accept Credit Card Payments

If you accept credit card payments, you need to find out when and how to bill your customers. It’s a good idea to consider billing them at regular time intervals, such as once a month or each time they purchase something from you.

  • Online
  • In-person
  • Using a mobile card reader
  • Over the phone

Choose a Payment Processing System

When a customer gives you their credit card to pay, there’s more to it than simply swiping or inserting the card. The customer’s card and account details have to be reviewed and processed electronically so that payment from them can be authorized.

All of this happens digitally behind the scenes in a matter of seconds (How to accept credit card payments), but you need to make sure that the payments are coming from a source that looks legitimate – and for that, you need something called a Merchant Account.

Get Your Credit Card Payment Software and Hardware in Place

Once you have a method of processing credit card payments, you may need to update your point of sale system or hardware to accept them.

Benefits of Accepting Credit Card Payments

Benefits of Accepting Credit Card Payments

Credit cards have become a primary means of transaction for most people, whether at brick and mortar locations or online. Accepting credit cards, however difficult it may be to implement at first, can provide some advantages for your business that may pay off over time:

  • Improving cash flow, since can speed up payment times and reduce delays
  • Legitimizing your business in the eyes of customers
  • Potentially boosting sales volume, since your customers will have more ways to pay

If you’re still not convinced about accepting credit cards for your business, consider the steady growth of credit card transactions compared to other payment methods.

Research from Deloitte indicates that credit cards comprised nearly $4 trillion in payments in the United States in 2018. Out of all payments, the use of cash declined while credit card and debit card transactions increased from 2016-to 2018.

What Types of Businesses Can Accept Credit Card Payments?

What Types of Businesses Can Accept Credit Card Payments

How do you know if your business can accept credit cards? Here are some more details:

  • You run a brick-and-mortar business
  • Your business operates completely online
  • You have a traditional small business with employees
  • You’re a sole proprietor with zero employees
  • You’re an independent contractor or freelancer 
  • You have a mobile business (such as a food truck or dog grooming service)

Accepting credit cards doesn’t have to be as complicated as everyone makes it out to be. It may give your clients more time for shopping which in turn may increase their total bill. At the same time, accepting credit card payments can improve your cash flow and income (How to accept credit card payments), because you get paid faster from your customers.

Benefits aside, accepting credit cards also has its downside – it costs more money in fees. To not lose money by charging non-customers and to reduce fees for customers, you should consider using offshore merchant accounts like ones offered at Parallels Payments for example.

Average credit card network processing fees

Credit card network Processing fee range
American Express 2.5 percent to 3.5 percent
Discover 1.56 percent to 2.3 percent
Mastercard 1.55 percent to 2.6 percent
Visa 1.43 percent to 2.4 percent

Accepting credit cards in person, online, and over the phone

Accepting credit cards in person, online, and over the phone

you need the following:

Payments processor

The people who offer a service that allows you to make payments through this payment processor are called “Payment Processors.” Payments Processors charge a small fee for their services, which is automatically added to the amount of money you are going to pay.

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Point of sale system

This is the software that is used to sell stuff. The hardware is typically some sort of terminal, which is usually a host computer or a dedicated piece of equipment that connects your POS with the rest of your network. Free POS software exists but ones with better features and flexibility have a monthly or an annual fee, depending on what you can afford for your business.

Card reader

Credit card readers will often come bundled in with the installation of a POS system but make sure that you check with your provider to see if they do, or what is included or isn’t. Sometimes there are ones that they may include for free, while other times they may be sold on their own.

Most companies will bundle services and hardware together into one package (How to accept credit card payments), but sometimes this won’t always work as you may need to find out the best way to run your business because combining everything in one might not always be the best route.

Vend POS offers many payment processors and secure business credit card reader options which means you can choose the best solution that works for your business type and the ways you want to run it.

How to Accept Credit Card Payments Online

How to Accept Credit Card Payments Online

Many small businesses are now e-commerce-first or even eCommerce-only. Whatever type of business you own, giving your customers the ability to pay with their credit card online provides them with more convenience and can boost sales.

Retail shops that accept orders online and any digital services companies wouldn’t be able to function without this capability.

What do you need to accept online payments?

Payment gateway

Frankly, you need better scaffolding if you want to make sure your payment page is going to stand the test of time. For example, you might want to consider Stripe or Braintree. These companies offer state-of-the-art payment gateways. You may also wish to check out in-person POS systems that come with the option of accepting credit and debit payments directly on an internet-enabled terminal or through e-commerce integration with a 3rd party.

Payment processor

Like with in-person payments, a payment processor initiates and completes online transactions with credit card companies and banks. They do this for a fee that is often charged for every transaction. Payment gateways (a type of payment processing service) also include additional services related to the acceptance of payments.

Learn more about NYCO Credit Card Pay Online

What else should you consider before approving credit card payments?

Now that you have an understanding of your fields, you can speak to their features. For example, the Clover POS terminal can be used for a retail shop environment and offers a fast, easy way for customers to make purchases. However, if you are in a cafe that requires patrons to pay at their tables, or if users might walk off with your portable terminals using them as wallets (theft risk), investing in Toast’s touchscreen handheld terminals would be preferable. Allow your target audience to focus on the things they’re considering most important when purchasing such pieces of equipment depending upon the needs of their business.

Hardware cost

A credit card read machine is a must-have for any small business that doesn’t own its physical presence. The credit card reader price varies from free to thousands of dollars for complete point-of-sale systems such as tablets for employees or in-store screens that customers can use to sell products, take orders, and/or pay with a card if needed.

Subscription fee

You don’t have to pay for everything, but most business-to-consumer services charge a monthly fee. That fee depends on how many transactions or services you need from your provider. For small companies, many providers offer one-size-fits-all plans, similar to what you’d find in the commodities market. When you buy a plan for $300 per month, it covers any number of transactions within that $300 limit so your total costs do not increase as your business grows or new needs are required.

Other businesses allow you to upgrade or downgrade service tiers and add modules if needed without additional charges as your company’s growth progresses meaning increased savings (How to accept credit card payments).

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Transaction fee

When an average consumer shops online, they tend to do so from the comfort of their home or at work. This means that every time you get a customer who uses a card instead of cash to pay for something, you’re going to lose a portion to the credit card companies, regardless of whether it’s in-person or not.

This fee is determined by specialist companies and is usually calculated as either a percentage of the total order or as per what type of carte is used on top of that fees are often greater when it comes to online transactions rather than physical ones because there’s more risk involved and they have to be protective (How to accept credit card payments).

What happens when a customer pays with a card?

What happens when a customer pays with a card

If a customer swipes, taps, or dips their card into a card reader, it triggers a chain reaction among intermediaries:

  • To start accepting credit card payments, for your business to offer the best experience possible for your customers, then the first step is to set up an account with a card processor. And once you do that and if your website supports payments via card reader, you will be able to provide convenience and flexibility to your customers by allowing them to pay via credit cards online.
  • However, as is true with any process, the payments system isn’t made up of just 1 person this is why they have many systems in place that help to ensure each payment is authorized by the issuing bank or card network before it ever reaches you (How to accept credit card payments).
  • The request is judged by an issuer who either gives their thumbs-up or thumbs-down to the proposal.
  • If your transaction is approved, you can pay up and complete the transaction (How to accept credit card payments).
  • Once the transaction is approved, the payment processor tells your bank to send funds.

The best way to accept credit cards for small business

The best way to accept credit cards for small business

We know what you’re worried about. You don’t want to make a mistake when choosing the right credit card processing company for your business. And that is why we are going to take away some of the pressure on you by helping you with the first step: comparing 5 of the most popular companies in this industry!

PayPal

Best for in-person retail

PayPal started life as a way of sending payments to friends through email, but now the company offers an impressive range of e-commerce services.

Pros

  • PayPal is a widely trusted name that can help build confidence with your customers.
  • Transaction fees are competitive with other providers.
  • Many different options for processing credit cards, including PayPal Checkout for online payments, the PayPal Here point of sale system, and PayPal Invoicing for billing for services.

Cons

  • PayPal’s extensive offerings can make it difficult to decipher the differences and choose the one that works best for your business.
  • Many account services, including chargeback protection, account monitoring, and recurring billing (How to accept credit card payments), require additional fees.

Fees

PayPal charges the following processing fees for credit card payments:

  • In-person transactions: 2.7 percent + $0.30 (e.g. $25 transaction = $0.98 fee)
  • Online transactions: 2.9 percent + $0.30 (e.g. $25 transaction = $1.03 fee)

Shopify

Shopify is an e-commerce platform that lets people sell products. Shopify Payments helps you out when it comes to taking credit card payments, both in-person and for online businesses.

Pros

  • Built to be used with Shopify’s signature e-commerce platform.
  • Offers competitive fees for processing credit cards.
  • Charges the same fee to process card-not-present transactions as it does online payments.

Cons

  • You need to have a website through Shopify to access their payment processor.
  • You’ll have to pay a monthly fee for the platform on top of regular credit card transaction fees.

Fees

Shopify charges the following processing fees for credit card payments:

  • In-person transactions: 2.7 percent (e.g. $25 transaction = $0.68 fee)
  • Online transactions: 2.9 percent + $0.30 (e.g. $25 transaction = $1.03 fee)
  • Card-not-present transactions: 2.9 percent + $0.30 (e.g. $25 transaction = $1.03 fee)

Square Payments

Square brings us a one-of-a-kind card reader that can be attached to smartphones and tablets, turning them into payment terminals! Thanks to Square’s compact hardware offerings, it is great for mobile businesses such as food trucks (How to accept credit card payments), market vendors, or in-home service providers like plumbers.

Pros

  • Square is a leader in smartphone credit card reader hardware.
  • Its mobile card reader is typically offered to its merchants for free.
  • The card reader can work offline, so you can accept credit card payments in places without a reliable Wi-Fi connection.
  • Contactless payment solutions are also available.

Cons

  • High fees for in-person transactions.

Fees

Square charges the following processing fees for credit card payments:

  • In-person transactions: 2.6 percent + $0.10 (e.g. $25 transaction = $0.75 fee)
  • Online transactions: 2.9 percent + $0.30 (e.g. $25 transaction = $1.03 fee)
  • Card-not-present transactions: 3.5 percent + $0.15 (e.g. $25 transaction = $1.03 fee)

Stripe

Best for online businesses that want to scale

Stripe is an online payment processing company that was built with a simple idea in mind: to modernize the way people bought things online.

Stripe’s robust API helps you easily integrate its payment platform with other software solutions in your tech stack, like accounting and customer relationship management software, both of which are essential tools when running your own business.

Pros

  • Competitive rates for processing online credit card transactions.
  • The API gives you options to customize the software to your needs.
  • A variety of financial solutions, including invoice processing, make it ideal for businesses with their sights set on growth.

Cons

  • In-person transaction fees are more costly than those of other providers, making it a bad choice for brick-and-mortar retail.
  • The base solution doesn’t support card-not-present transactions, so you’ll need special permission to set up that capability.

Fees

Stripe charges the following processing fees for credit card payments:

  • In-person transactions: 2.7 percent + $0.05 (e.g. $25 transaction = $0.73 fee)
  • Online transactions: 2.9 percent + $0.30 (e.g. $25 transaction = $1.03 fee)

Venmo

Best for online-only businesses

Venmo is quickly becoming a household name around the world thanks to its innovative and easy-to-use payment service. At this time, Venmo works by transferring money between bank accounts, but soon it will be unrolling credit card payments options via the app as well.

Pros

  • Venmo is a familiar and convenient payment method for customers.
  • No additional setup fees.
  • Free standard transfers from your Venmo account to your bank account (usually takes one to three business days).

Cons

  • Not yet available for in-person payments. (That said (How to accept credit card payments), customers can pay through the app while in your store.)
  • Fee for instantly transferring money from your Venmo account.

Fees

Venmo charges the following processing fees for credit card payments via Braintree:

  • Online transactions: 2.9 percent + $0.30 (e.g. $25 transaction = $1.03 fee)

Using Credit Cards Safely: Tips for Small Businesses

Using Credit Cards Safely: Tips for Small Businesses

Fraud

If you’re not careful, some credit card systems can be risky business. If you’re using a credit card system that hasn’t been officially endorsed by the major networks, then your information (How to accept credit card payments) may end up in the wrong hands one way or another.

Processing fees

If you have little leeway for unexpected costs and face a thin margin, capital expenses, including credit card processing fees, could seriously impact your profit margin.

Chargebacks

A chargeback sounds like a scene from Star Wars, but it’s a legal dispute that customers initiate when they aren’t satisfied with the service you provide. Even if you can prove that there is nothing wrong with the product or service, it’s difficult and often costly to overcome chargebacks.

The Bottom Line

Today, it is unusual to find a small business that does not accept cash. This is because giving customers as many options as possible when it comes to payment can encourage more sales and boost convenience (How to accept credit card payments). And while there are some risks associated with accepting cash payments, this is generally offset by greed.

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