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Your Essential Guide to POS System Implementation
A reliable point-of-sale (POS) system is essential for business success today. Setting it up isn’t…
Read More >>For businesses, accepting credit card payments is no longer optional. In fact, businesses that don’t accept them risk being left behind.
Yet, how do you accept credit card payments? It starts with a payment processor. This is a company that processes the transaction and makes sure the funds land in your business bank account.
Businesses accept credit card payments using a payment processor. When a customer swipes their card, the processor verifies the details, checks for sufficient funds, and then approves or declines the transaction. If a transaction is approved, the processor transfers the payment amount from the customer’s account to the business’s.
How to Accept Credit Card Payments: A Quick Overview
In other words, to to accept credit cards as a new business, you need two things:
This guide will walk you through how to start accepting credit card payments in person, online, and credit card processing fees you can expect. But generally, if you have a payment processor (or merchant account) and a card reader, you can start. We’ll cover:
Payment processing companies facilitate credit card transactions. In particular, they handle the authorization and settlement of the transaction, ensuring the funds are transferred properly and land in your business account.
In other words, they are intermediaries. Processors ensure secure and efficient payments between the customer and business.
Understanding how credit card payments are processed can help businesses troubleshoot issues and enhance checkout experiences. Here are the four steps:
The type of processor you work with is dependent on 1) whether you will be selling in-store or online, 2) the transaction volume, and 3) the cards / payment options you want to accept. The most common types of credit card payment processors include:
These are just the most common types. For example, a high-risk payment processor is another option, which offers credit card services for businesses in industries with a higher risk for fraud or chargebacks. High-risk providers generally charge higher credit card processing fees. For example, credit card processing for smoke shops may be subject to high-risk fees.
Choosing between a payment provider and a merchant account depends on your business’s priorities.
Payment providers offer easy setup, integrated tools, and flexibility for startups and businesses with limited technical expertise. However, they often have higher transaction fees and limited control.
On the other hand, merchant accounts offer lower fees for larger transaction volumes, customization options for checkout experiences, and direct fund deposits. Yet, they require more complex setup, potentially involving credit checks, longer approval times, and might suit businesses with technical know-how and a need for control. Evaluate your business needs before deciding.
Although competitive rates are a deciding factors, there are many other considerations to make when choosing a processing company. Here are some factors to consider:
Pro Tip. Choose a system with integrated credit card processing in your POS, which is a key benefit of a POS system with integrated processing vs POS + third-party processor. The best marriage is a POS that offers card processing services. However, if you choose a third-party payment processor, be sure they offer support for your existing POS system.
Before you start taking credit cards, think about how your customers use their cards. If the majority swipe their cards when they visit your physical location, a POS integration might suffice.
However, you might also want to accept credit cards over the phone, online, through several channels, or even on a mobile device. The type of credit card processing equipment you require will be determined by the types of payments you take.
When you run a brick and mortar business, like a store or medical practice, you are in this situation. At your place of business, you receive payments at one or more cash registers.
Equipment Needed: A hardwired countertop credit card terminal or a point of sale (POS) system. If your POS doesn’t support payment processing, you will need a stand-alone credit card reader. Be sure to look for a card terminal that allows you to process payments in offline mode.
If you operate an online store, a payment gateway is necessary for online credit card processing. Credit card processors may make a gateway available to customers, either directly or via a third party.
You often pay an extra monthly fee to a credit card processor for this service, so you should only set up a payment gateway if you sell products online or if the value of your rare but sizable online sales makes up for the expense.
Examine each processor’s terms and conditions before signing up because some impose a gateway setup fee and a per-transaction fee in addition to the monthly price.
Equipment Needed: A virtual terminal where you can manually input credit card information, as well as back-end interaction between your website and your payment gateway.
Businesses that travel, frequently conduct business at trade exhibits, or simply need the ability to accept payments anywhere in their facility can benefit from mobile credit card readers. A significant benefit of using your phone to accept credit and debit card payments is that certain mobile credit card processing apps come with basic POS functions in addition to portability. For small businesses that aren’t yet prepared to make the investment in a full-fledged POS system, a mobile POS system can be quite beneficial because it not only accepts payments but also helps you monitor your sales and inventory.
Equipment Needed: You will need a mobile credit card reader or app in order to accept credit card payments on your phone or tablet. Many readers connect their headphones to their mobile device’s headphone jack. Bluetooth is used by more sophisticated mobile credit card readers to connect to your mobile devices. Swipe-only, swipe plus chip (EMV), and swipe, chip, and contactless (NFC) payments are all supported by mobile card readers.
You are not limited to accepting payments using a mobile credit card reader. With extra hardware, these readers can be utilized as components of a larger system.
Payment processing costs and fees vary widely depending on the payment provider, the type of transaction, the payment method used, and other factors. Generally, payment processing fees include:
In addition, there are some less common fees you should be familiar with. These fees occur based on the type of account you have:
To get specific information about payment processing costs and fees, it’s best to contact payment processing providers directly and ask for a detailed breakdown of their pricing structure based on your business’s needs.
The cost per transaction that you pay can vary significant. This is generally dependent on the volume of transaction your business does and the provider’s fee structure. However, most credit card processors structure their fees using one of the following methods:
Pro Tip. Always be aware of the fees that your credit card processor will charge you. Generally, you’ll want to ask about annual or membership fees, or if there are minimums per transaction. However, you’ll also want to focus on strategies to reduce processing costs, like dual pricing or cash discounts.
You would have these options if you wanted to accept credit cards online, depending on the gateway.
Get the link from the company that handles your payments. Depending on your service provider, you might be able to modify the URL as you choose. Next, choose a location for the link on your website. Following that, the customer will do the following:
St. Jude Children’s Research Hospital is a wonderful example of an organization that employs this strategy. Already generated is the payment page.
These are the payment pages you have encountered while conducting retail online shopping. Customers look through online stores for products before adding them to their shopping carts. When they’re prepared to leave, they do the following:
If you’ve been writing down credit card information on paper and then putting it into a terminal or POS after the call has ended, you’re doing things insecurely if your business accepts credit cards over the phone, such as if you run a restaurant that offers delivery or takeout.
Instead, if you run a service-based business like a law firm or marketing agency, utilize a virtual terminal or your payment gateway to produce and process payments for invoices as well as to accept phone payments.
Each of these techniques will handle your money such that it enters your account once you’ve batched out and posts it to your dashboard.
Does your POS provider offer credit card processing? If not it might be time to switch. FTx POS offers full-service credit card processing for our customers. With us, you can count on:
For more, contact our team today. We’d be happy to show you how FTx Card Payments can save you money!
Learn more about this topic. See these related posts on the FTx POS blog.
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