Need to accept credit cards? 5 critical considerations
Consideration #1: Know it’s going to cost you money
We’re sorry to be the bearers of bad news, but you can’t completely avoid the fees of credit card processing. You’ll likely pay per-transaction fees, interchange fees, incidental fees for things like chargebacks and perhaps a monthly or annual fee. Some of these fees are negotiable with your credit card processor, while other fees are firm. Particularly if you run a lot of transactions with your payment processing partner, it’s worth asking if they’ll give you a break on some of the fees.
Consideration #2: Know the major players of processing electronic payments
Speaking of being aware of many types of fees your company will be assessed, it’s also important that you understand the key players in a credit card transaction. They are:
- Customer. The person who presents a card for payment of goods or services at a merchant location or online.
- Merchant. The retailer, restaurateur or other business type that accepts card payments for their goods or services.
- Issuing bank. The bank that issues that credit or debit card used by the customer.
- Credit card association. The card network (card brand) that creates the cards (Visa, MasterCard, American Express and Discover are the biggies) and sets the rules for processing.
- Acquiring bank. Also known as simply the acquirer, this is a bank or credit union that processes card payments on behalf of the merchant. Some card associations—such as Discover and American Express—act as their own acquiring banks.
Consideration #3: Know how a credit card processor can help grow your business
Your plan to accept credit card payments should include more than just acceptance and processing. The best processors will help you grow your business beyond just allowing you to run credit card payments. Here are some of the ways that merchant processing can help you grow your business:
- Accept a wider variety of payment types to attract new customers
- Expand your business to an online storefront or on the road with tablet-based POS systems that you and your staff can use to accept credit cards at remote locations such as pop-up shops or festivals
- Improve your marketing efforts using customer data and analytics captured during credit card sales
- Offer a gift card program to boost brand loyalty and build another revenue stream for your business
Consideration #4: Know which payment types you should accept
Today’s savvy consumers have come to expect a wide variety of payment options when shopping anywhere from their neighborhood coffee bar to a big box outlet. When you’re considering accepting credit card payments, consider also buying equipment and services that will allow your business to accept the following payment processing formats:
- EMV chip cards
- Mobile payments
- Other NFC/contactless payments
Consideration #5: Know what software and hardware you need
While you’re choosing what payment processing types are best for your business and customers, you’ll also need to consider what hardware and software investments you’ll need to make to support these technologies. These days, a POS solution that accepts both traditional magnetic stripe cards and EMV chip cards is a must. However, if you think your business would benefit from also accepting mobile and NFC payments, you’ll need a separate reader or built-in reader for those payment types. If you want to print paper receipts in addition to being able to email or SMS text receipts, you’ll need a receipt printer. There are lots of options to consider—and they won’t all necessarily make sense or be a sound financial investment for your business. Contact your payment processor to better understand what software and pieces of equipment your company needs to get the most out of payment processing.