There’s a lot that goes into accepting credit card payments. You have to find a reputable processor, get your POS systems ready, and finally, let your customers know about the new changes you’ve made.
If you’re ready to start processing credit cards, this guide will serve as the perfect learning tool for you.
Reasons to Accept Credit Card Payments Online
Accepting credit cards can attract more customers and boost sales. As a matter of fact, recent studies show that 75% of all modern consumers prefer making card payments to using cash. If well-tapped, this large number of customers can grow your business and establish it as a key player in the industry.
Running an eCommerce business is the other reason why you should start accepting card payments. In physical stores, customers have the option of using the cash in their wallets to pay. This option is completely removed when it comes to online stores. Here customers can only use their credit cards to make fast and secure payments.
Business legitimization is the other reason why you should start accepting credit card payments. Don’t get us wrong. Many legit businesses accept cash. However, card processing has a certain aura that grabs people’s attention and makes them trust a business.
How to Start Accepting Credit Card Payments?
Online stores can’t run in the same way brick-and-mortar businesses do. For that reason, begin by finding a payment processor suitable for your business. Do this considering the size of your business, the types of credit cards you’ll be accepting, and the price.
After finding a processor, open a merchant account. Most payment processors will ask you to provide your personal information and a few details surrounding your business. When you get your account up and running, proceed with setting up your payment terminals.
If you have a physical store, set up your POS system and card readers and if you’ll be accepting payments online, ensure your virtual terminal is in working condition. Some payment processors also offer POS systems and card readers to their merchants, while others don’t.
Once you get your hardware and software working, you can accept your first credit card transaction and celebrate this huge milestone.
Fees and Pricing Models of Payment Processors
To accept credit card payments, you’ll have to choose a pricing model from the options provided by your processor. These pricing models include interchange-plus pricing, flat-rate and tiered pricing.
In interchange-plus pricing, you’ll pay two fees. There’s the interchange fee that is charged by card networks such as Visa and the markup which is what the credit card processor charges. Interchange-plus pricing is transparent and usually costs less than other pricing models.
Unlike interchange-plus pricing where you’ll pay a different fee for every transaction, flat-rate pricing charges a fixed amount for all transactions. This pricing model makes calculating gross sales easier but it can be a bit expensive.
Tiered pricing separates transactions into tiers or groups. Here, you’ll be paying different fees when accepting payments online and in person. Some tiers can also include how physical cards are processed, that is if they are swiped, keyed in, or dipped.
How to Pick the Right Processor for your Company’s Needs?
The credit card processor you choose can have a huge impact on how successful your business becomes. That is why you must consider a few things such as the number of fees you’ll be paying. Aside from the transaction fees, check whether you’re expected to pay account setup fees, monthly minimum fees, statement fees, and early termination fees. If the fees are too expensive, look for a better processor.
Next, check the quality of the software and hardware being offered by the processor. If the processor offers POS systems and card readers, ensure they’re of the best quality. You also want to look for a processor that offers options for accepting payments online through smartphones.
Security is also important in credit card processing and especially when it comes to online stores. Look for several fraud-prevention tools such as geolocation, tokenization, and address verification. These tools will protect both your business and customers from financial ruin and help reduce those hefty chargeback fees that may show up in your statements.
Conclusion
Credit card processing is essential for all businesses under the sun. With good software and a few credit card readers, you can grow your market to greater heights and become a successful entrepreneur.
Find a good processor today, create your merchant account and start accepting credit card transactions. You may not see any results immediately but we promise you, the benefits you’ll get in the long run will be worth the wait.