Find out how to take credit card payments
Step 1: Set up a merchant account
The first step to accepting credit cards at your business is to set up a merchant account. A merchant account is a special type of bank account that will enable your business to accept credit and debit cards from customers. Just like any kind of bank account, you have to apply, qualify and be approved for a merchant account. The acquiring bank—or their processor—is the entity that handles your merchant account.
Step 2: Select your POS terminal or other payment system
Once you’ve been approved for a merchant account, you’ll need to select the POS terminal or other payment system by which you’ll actually process the credit card payments. Depending on the type of customers you have and those you’d like to attract moving forward, you may want to consider purchasing a reader for mobile wallet payment acceptance and other NFC (near-field communication) payment types, for example. Having the capability to accept EMV chip cards is a must today—so make sure you’ve accounted for that when you’re shopping for your terminal. If your company does business on the road—beyond the confines of your physical location—then you may want to consider investing in a tablet-based POS system that can be easily transported to practically any location.
Step 3: Accept card payments from your customers
Once you have your payments system set up, it’s time to begin accepting card payments. In the case of traditional magnetic stripe cards, your associates will swipe the card through your card reader to capture the payment data, which will be sent along a secure network for processing. If a customer presents one of the newer EMV chip cards, he or she will “dip” the card into the reader until the transaction is complete.
Step 4: Get paid for your credit card transactions
Usually at the end of each business day (perhaps less frequently for smaller volume merchants), a merchant will send the batch of authorized transactions to be settled. Once the settlement has been made, the money will be credited to your bank account via ACH (automated clearinghouse). The length of time it takes from your customer swiping his or her credit card to those funds hitting your bank account varies depending upon your agreement with your acquiring bank (or their processor). Before you enter into your merchant account agreement, make sure you understand this timeline so you don’t get caught by surprise and your operating funds are short when it’s time to run payroll or order more inventory.
Deciding to accept credit cards is a big step for any business—but practically necessary in this day and age. No matter your business type and industry, partner with a processor that has experience working with similar clients and is willing to take the time to listen to your needs and answer your questions.