Get started with point of sale credit card processing in 5 clear steps
Accepting credit cards is not optional for businesses today. No matter how large or small your operation is, whether you sell everyday goods or high-end luxury items, your customers will expect to be able to pay for their purchases with their preferred credit or debit card.
A quick internet search about accepting credit cards can bring up so many results it can be overwhelming to know where to begin. If you’re reading this, you’ve come to the right place. We’ll break down the process to begin accepting payments into five steps. Let’s get started!
#1. First, choose the right point of sale system for your business.
There are many considerations in choosing a point of sale (POS) system. First, you’ll want to think about how you would like to accept payments. Will you do most of your business instore or online or a combination of both? Do you want to be able to take payments offsite? What is your budget for purchasing POS hardware, software and peripherals like barcode scanners and receipt printers? What are your plans for expanding your business in the future?
The answers to all these questions will help lead you to the system that’s right for your business. In general, POS systems fall into the following categories:
- Stand-alone terminals—offer the basic means to accept credit and debit cards. These are typically counter-top devices that allow for cards to be swiped or dipped for payment. Some even have NFC capabilities for mobile payments. Because stand-alone terminals cost less than other payment solutions, they are often a good choice for new businesses that want to keep overhead costs low. They are also attractive to businesses that don’t have a need for additional business management functions like inventory tracking, accounting reconciliation, reporting, or employee management.
Pros: Affordable, simple to set up and use
Cons: Limited integration with other business systems
- Mobile terminals—enable credit and debit card acceptance away from a designated static checkout station. For instore use, a mobile terminal uses wireless connectivity. This allows restaurant servers, for example, to take payments tableside. A mobile terminal outside of a brick and mortar environment consists of a payment “dongle” and a mobile device (think Square). This allows businesses to take payments offsite, whether at a craft fair, farmer’s market, or at customers’ residences.
Pros: Bust lines instore or take payments on the go
Cons: Like stand-alone terminals, business management functionality can be limited
- Integrated POS systems—offer robust functionality in an all-in-one solution that provides processing, reporting, inventory and accounting management, loyalty, and more. Integrated POS systems are typically designed for specific industries with built-in features that address that particular industry’s needs. For example, a restaurant POS system will have software to manage menus and bar tabs, while a retail POS system will include features that streamline inventory tracking and pricing changes.
Pros: Customizable and comprehensive features
Cons: Stationary and take up more counter space
- Smart terminals—combine the simplicity of a terminal with the advanced capabilities of an integrated system. A smart terminal consists of a tablet and associated payment apps, along with a built-in credit card reader and a scanner. Some offer two screens—one for the employee and one for the customer. Smart terminals are a good choice for merchants looking for the next level up from a basic terminal to create a more robust payments experience—boosting their ability to manage their business and enhance customer service.
Pros: Customizable and flexible to adapt to a business’ growth
Cons: More expensive than stand-alone and mobile terminals
- eCommerce solutions—facilitate online payments via a direct eCommerce platform, a gateway, a hosted checkout solution, or an in-app purchasing solution. Regardless of the type of eCommerce solution, because of the card-not-present nature of online transactions, these solutions must employ robust anti-fraud tools that don’t infringe on the customer checkout experience. Larger businesses often opt for a direct eCommerce platform, while smaller businesses gravitate toward gateways or hosted checkout solutions.
Pros: Ability to reach more customers and expand online revenue
Cons: Additional fraud solutions are needed.
#2. Choose a compatible payment processor or payment gateway
The research doesn’t end when you choose your POS system. You also need to decide which payment processor or payment gateway to work with. While a payment processor that is integrated with your POS system provides a direct link between you and the processor, a payment gateway is a third party hosted payment solution that allows you to connect with your chosen payment processor as long as the gateway works with that processor.
Gateways generally don’t offer the broad range of customizable features that integrated solutions do. Similarly, not every payment processor offers the same products and services.
So, one of the first questions you’ll want to ask when evaluating potential providers is whether or not their processing platform is compatible with the POS system you want to use. It actually doesn’t hurt to look for a processor and a POS system at the same time, and it can save steps by combining two into one.
In addition to comparing processing rates, you’ll want to find out about the technology the processor or gateway offers and the extent that they support their technology.
Do they offer customer support and is it free and available when you need it? Are future upgrades included in your processing fees or charged separately? You’ll also want to ask about transaction funding timeframes and other value added services that differentiate one processor from another (see #4).
#3. Make sure your solution includes the necessary security features to keep transactions safe and protect your customers and your business from a breach.
Between losing customer confidence and paying thousands of dollars in fines and penalties, not to mention being stripped of the ability to take credit cards in the future, a data security breach is not only bad for business, it can be devastating. So it’s in your best interest to do everything you can to prevent a breach from happening in the first place.
Payment security demands a multi-pronged approach encompassing both technology solutions and best practices. It’s best accomplished in partnership with a payment processing provider. When evaluating your choice of both, here are five things to look for:
- EMV technology—chip card acceptance is an effective way to reduce card present fraud and has become more commonplace since the fraud chargeback liability shift that occurred in October 2016.
- Encryption and tokenization—encryption protects card data in transit while tokenization secures data for post-authorization transactions such as tip adjustment and recurring billing.
- Compliance with PA-DSS—PCI compliance is mandatory for all businesses that accept credit cards and includes payment system requirements. The PCI council maintains a list of PA-DSS validated payment applications for easy reference.
- Anti-fraud services—prevention is the best medicine and some payments providers dedicate entire teams to fraud detection and prevention.
- Breach protection—if you do suffer a breach, having financial protections in place can make a big difference. Be sure to ask about the availability of breach protection to reduce your liability in the event of a data compromise.
One more note about security: if you choose an online processing solution, you’ll need additional protections. While EMV counters card present fraud, it is ineffective in an online sales environment. One option is to implement an SSL (secure sockets layer) certificate, which allows sensitive payments data to be securely transmitted between your site and your customers’ browsers. You can also require that customers enter the billing address for their payment card as well as their card’s CVV code. All of these measures will help bolster security for online payments.
#4. Prioritize the value added features you want in your payment solution.
Your business is unique and as such, will have unique needs when it comes to processing payments. Some payment processors provide pre-built, comprehensive packages; others offer features a la carte; while still others provide only the basics.
In order to get the most out of your POS solution, it’s worth thinking about the features you want, and evaluating the availability and costs offered by various providers. Here are some things to consider:
- Customer support—is it free and available when you need it?
- Funding—how fast will you get your deposits from credit card transactions?
- Transaction and data reporting—does it offer actionable insights into customer behavior and sales trends?
- Gift and loyalty—is it built to scale with your business and is it compatible with your POS system?
- Internet and network outage protection—are you able to process payments if your internet connection fails or the authorization network goes down?
#5. Don’t forget to ask about installation assistance and staff training.
The best payment solution in the world offers little value to your business if it’s too difficult to install or learn to use—which is why it’s important to get first-hand knowledge of the solution you are considering before you commit.
Whenever possible, ask for a product demo so you can try out the solution in real-time. Be sure to ask about set-up and integration to your existing systems. Find out about fraud protocols and whether necessary updates are automatically executed or if you have to implement them yourself.
And of course, there’s the basics of processing. Find out how you will run various payment types, from EMV chip cards to contactless payments, as well as how you will load gift cards and process refunds.
Some POS dealers and payment processors offer staff training as part of their overall package and fees for this service can vary. More simplistic solutions generally offer little or no training, so be sure you’re prepared if that’s your choice.
Still unsure about how to start accepting credit cards? Help is available
Some things are easier said than done, and no doubt, there are many nuances involved in accepting credit cards. If you have questions we haven’t answered in the five points listed above, check out these resources, and give Vantiv a call to learn more.