Daily, as the social and economic sands shift with the pandemic, more and more new businesses are starting up – from small online retailers to new LLCs. Ecommerce is now normal. It’s something everyone has heard of and most have engaged with. A key component to the success of commercial activity across the Internet and the convenience for customers to shop online is via credit card. These make for swift transactions but they also benefit the businesses, as well as the customer. Here, we’ll take a quick look at how to set up credit card payment for your business.
What Types of Businesses Can Accept Credit Card Payments
Any firm has the potential to accept purchasing funds via credit if they decide to have that as a payment option.
Accepting credit cards is standard practice now whether the business is large or small, and most people, in fact, expect the use of credit to be possible. Transactions in this manner can be applicable to:
- High street stores;
- Online businesses (eCommerce, legal services, etc);
- Online-only business;
- Small independent retailers;
- Limited Liability Companies;
- Freelancer services;
- Mobile services (food catering, for example).
Benefits of Accepting Credit Card Payments
Providing the ability to pay via credit card is not only convenient for customers but there are a couple of ways in which it can prove to be very beneficial to the business as well. Firstly, from the customer perspective, it makes a business look more professional and legitimate. Think of the places you go to yourself. More often than not, on windows or at cash registers, you will see the names and logos of prominent banking services as accepted methods of payment: Visa, American Express, and so on. Seeing these is reassuring.
Secondly, by providing the option to pay with a credit card, another lane is opened in which sales can be driven. Seeing credit cards as an option can increase sales turnover.
Add to this how the economic climate has changed over the last couple of years. Businesses are accepting cash far less often: equally, people are carrying less cash on them. Since lockdown measures have been introduced, lifted, and re-introduced during the course of the pandemic, contactless methods and transactions through credit have become more the rule than the exception. The digital payment trend was already on an unstoppable rise before 2020: COVID-19 has accelerated that growth. Contactless payments have become the norm. So too has the utilization of credit cards for more and more transactions – especially online, from home.
How to Accept Credit Card Payments
The thought of establishing a credit system for your place of business can sound daunting. There are some necessary details that need to be addressed and in place, but once up and running, it’s quite straightforward to manage and maintain.
Before anything else, your business type will determine the way in which you will be accepting payment by credit card. For example, if your business is a physical presence on a high street, then you would need to accept credit cards in person. For eCommerce, you would need to accept online. A mobile card reader would be needed if your business is one that is on the move.
Important to remember: you will need to decide which financial providers you will accept – Visa, Mastercard, American Express, and so on.
The next step is deciding on your payment processing system. When a customer pays, it’s not quite as simple as just swiping their card or entering details. All of the customer’s information has to be processed and checked. This is done digitally, and once processing has been completed and the card has been given the okay, payment can be authorized. It only takes a few seconds for the transaction to be completed, but in order to be able to do it all, you will be required to hire a payment processor.
There are two ways in which credit card payments can be accepted:
- Merchant accounts;
- Payment service provider.
Merchant accounts are accounts with a bank that have been opened with the specific purpose of accepting credit card payments from your business. Payment service providers are simply businesses that are there to accept credit card payments for you without having to set up a merchant account with a bank.
Merchant accounts make more sense for bigger businesses. Bigger business means higher turnover rates: so naturally, that tallies to a substantially larger flow of transactions via credit providers. For new businesses, small businesses, and those likely to have a low credit card transaction activity, a payment service provider is more likely to be the better of the options.
Note: When making the decision on which option is best for you and your business, be sure to remember and look into the cost of transaction fees and contract lengths with payment service providers and any provisos with your bank for a merchant account.
Now the final step – getting the payment hardware in place and its software set up. If you are running a business from its actual physical location – a highstreet retailer, for example – then you possibly may need to acquire checkout software so as to enable the acceptance of payments – or even install a card reader that is EMV chip enabled. Some, but not all, payment service providers can provide you with the hardware you will need so as to be able to accept credit cards in-store
How to Accept Credit Card Payments Online
Providing the ability for customers to pay online with a credit card is a must. This is essential for business today more than ever. Not just because of the growing trend for the preference to shop online and the rise of all things digital, but because the last couple of years has seen an increase in food orders for home delivery. This ranges from full-on grocery shopping to ordering takeaway food. Without being credit-card capable, a huge proportion of businesses would have missed out on a lot of business since 2020.
If you want your customers to have the ability to pay online via a credit card, then this is simple enough to set up. You will be required to set up a payment gateway (this may have been provided to you already with your payment service provider or merchant account) and will need a digital storefront. These are easy enough to get. All you have to do is register for an account with an e-commerce platform provider – of which there are plenty. Credit cards are now so universal, as well as integral to the business, that whichever eCommerce platform you opt for is sure to support the ability of payments via credit cards.
If your business happens to have a physical presence on the streets, as well as a virtual one online, remember that credit card payments made online will generally have a higher transaction charge applied to them.
The Best Way to Accept Credit Cards for Small Business
Ultimately, the best way to accept credit cards for small businesses depends on certain factors directly related to your business type. What is it that you are selling? Where are you selling it from (a store or online)? How many sales can you realistically expect to be making, and is credit card payment likely to be how customers will prefer to pay for whatever it is you provide?
While budgeting for a payment service provider, the best bet is to go with a flat-rate plan if you are expecting to make less than five thousand dollars per month in sales. This is the most affordable and simplest way for dealing with credit payments and small businesses. Remember that the main options for accepting credit card payments are:
- In-person payments (physical store);
- Online payments (digital store);
- Mobile payments (mobile ard reader).
It’s quite possible of course that you may run a combination of credit card payment options, particularly if you have a physical and digital business presence.
The more the number of ways in which a customer can pay, the more sales a business will get. Opening up as many options for payment makes sales more likely and today, it’s more common than not for small businesses of all varieties to give customers the option of paying by credit card. Credit card payments don’t come risk-free of course, just as anything else in business, but the pros far outweigh the only possible cons. Having the option to pay by credit card is crucial to the growth of new and small businesses alike