As technology continues to develop, even the way we pay for goods is being revolutionized. Credit cards, in particular, are becoming more of a necessity, given the rise of online shopping. Businesses also see several advantages in credit card transactions, such as doing away with change and errors in reconciling the amount in the cash register with the amount on the books.
With the trend being to no longer carrying cash, accepting credit card transactions is necessary in order to ensure that you don’t miss out on any business opportunities. Even new and small businesses are encouraged to start accepting credit card payments as soon as possible.
While this may sound challenging at first, if you understand the process and requirements, processing credit card payments for your business can easily be accomplished. Here are some important tips to help in introducing credit card facilities to your small business:
1. Know your needs.
Depending on the nature of your business, there are different credit card facilities that will come into play. If your business centers on online selling, you would need to select an online credit card processing platform.
You can then choose whether to avail of a prebuilt system or use an API to customize a checkout system for your website. Accepting credit cards at a physical store requires selecting which type of processing solutions you will be using.
Mobile processing solutions use small, portable readers to make the transaction, and are most frequently used in dine-in restaurants. Point-of-sale is also an option, where the credit card reader is located at the payment counter, as is the case in retail outlets and to-go restaurants.
2. Select a credit card processor.
A credit card processor serves as the go-between your business and the merchant bank that handles your credit card transactions. Credit card processors are usually classified into one of two types of providers.
Payment service providers are recommended for small businesses that do not handle too many payments, as they are quick and easy to set up but can be frozen by the bank easily if an unusual pattern in the transactions is detected.
Merchant account providers are recommended for established businesses, as the bank does preliminary paperwork to legitimize the business and cost a bit more, but pay off with good stability and customer service.
3. Familiarize yourself with pricing.
Credit card processors structure their fees differently, with each one working best for a certain kind of business. Fixed-cost pricing, where a fixed percentage is charged per transaction, is recommended for startups due to lower overhead costs, though they can be more expensive for processing certain debit or credit cards.
Interchange pricing is recommended for medium-to-large sized businesses, as there is an additional interchange fee to be paid, making it costlier but it becomes cheaper to process all kinds of debit and credit cards, compared with fixed-cost pricing.
For a small business, it is important to research well on the process behind accepting credit card payments so that you can get the best deal possible. When you finally do have your credit card transaction facilities in place, you can rest easy knowing that it will help your business grow to its highest potential and that you have finally made it as a legitimate enterprise.