Accepting payment by credit card is one of the easy ways to shop online and also gives small businesses a boost. Enabling customers to make payments with credit cards can alleviate the pressure of cash flow management and eliminate the inconveniences related to waiting for check payments.
If your business has yet to adopt credit card payment options, making this change might prove simpler than you imagine.
However, credit card payments offer convenience to customers and can significantly boost sales for businesses. This article serves as a comprehensive guide for businesses looking to accept credit card payments, covering the benefits, the process, security measures, and best practices.
What Types of Businesses Can Accept Credit Card Payments?
In short, credit card acceptance is feasible for almost any type of business. For instance, you have the option to accept credit cards if:
- You operate a physical store.
- Your business is entirely online.
- You manage a traditional small business with a staff.
- You are a sole proprietor without any employees.
- You work as an independent contractor or freelancer.
- Your business is mobile, such as a food truck or dog grooming service.
In any of these situations, incorporating credit card payments into your business strategy can be advantageous, as it simplifies the payment process for customers. The decision to not accept credit cards typically boils down to personal preference, rather than the nature of your business.
The Benefits of Accepting Credit Card Payments
Below are benefits to enjoy for accepting credit card payment as retailers online, instore, or by phone:
- Increased Sales: Credit cards provide customers with a flexible and convenient way to make purchases, which can lead to increased sales for your business. Customers are more likely to buy when they have the option to pay with a credit card.
- Enhanced Customer Experience: Credit card payments are quick and easy, reducing checkout time and improving the overall shopping experience. Customers appreciate the convenience and security of using their cards.
- Global Reach: Accepting credit cards allows you to reach a broader customer base, including international customers. Credit cards facilitate transactions in multiple currencies, making it easier to sell to a global audience.
- Lower Risk: Credit card payments are less risky for businesses compared to accepting checks, which can bounce, or cash, which can be lost or stolen. The funds from credit card transactions are typically deposited directly into your business account.
- Competitive Advantage: Many businesses offer credit card payments as a standard option. By accepting credit cards, you stay competitive and attract customers who prefer this payment method.
How to Accept Payment by Credit Card
Below are steps to follow to make payment:
Deciding on the method for accepting credit card payments is your initial task.
You can opt to receive credit card payments through various means:
- In face-to-face transactions
- Utilizing a mobile card reader
- Over the phone
The choice you make may be influenced by the nature of your business. For instance, if you manage a physical retail store, you might accept credit cards in person during checkout or online if you’ve established an e-commerce platform. However, if you operate a mobile business or offer services remotely, you may prefer a different approach.
Selecting a Payment System
When a customer hands over their credit card for payment, it’s not as simple as just swiping or inserting the card. Behind the scenes, the customer’s card and account details must be electronically reviewed and processed to authorize the payment to you. All of this happens digitally in a matter of seconds, but you’ll need to enlist the services of a payment processor to make it happen.
If you wish to accept credit card payments, you have two options: merchant accounts or payment service providers. A merchant account is like a bank account you open specifically to receive credit card payments. Payment service providers, on the other hand, are companies that enable you to accept credit card payments without the need to set up a merchant account.
Between the two, payment service providers may charge lower processing and transaction fees. This can be beneficial if you have a newer business or handle relatively small volumes of credit card payments. However, if your business processes a large number of credit card sales, a merchant account might be a more convenient way to manage your credit card payments.
Get Your Credit Card Payment Software and Hardware in Place
After you’ve established a way to handle credit card payments, you might have to make changes to your point of sale (POS) system to actually receive these payments.
For instance, if you have a physical store, you might need to acquire checkout software that can process card payments or install a card reader at the cash register that supports EMV chip technology. In some cases, payment service providers may provide the necessary equipment to help you set up credit card acceptance in your physical store or through a mobile card reader.
How to Accept Credit Card Payments Online
Small businesses, whether online or traditional, benefit from offering credit card payments for increased convenience and sales. However, below are steps to follow for online payment:
- Accepting credit cards online is essential for e-commerce stores, online ordering restaurants, and digital service providers.
- Setting up online credit card payments involves creating a payment gateway, often included in merchant accounts or payment service provider plans.
- You’ll need a digital storefront, often obtained through an e-commerce platform, to enable credit card payments.
Furthermore, you need to know that online credit card transactions usually come with higher processing fees compared to in-person transactions.
Best Practices for Accepting Credit Card Payments
- Transparent Pricing: Clearly communicate any fees associated with credit card transactions to customers. Many businesses choose to absorb these costs to improve the customer experience.
- Offer Multiple Payment Methods: Alongside credit card payments, consider accepting other popular payment methods like mobile wallets (Apple Pay, Google Pay) and online payment platforms (PayPal).
- Regularly Update Software: Keep your payment processing software and systems up to date to ensure they are secure and functioning correctly.
- Monitor Transactions: Regularly review transactions for any signs of fraudulent activity. Payment processors often offer fraud detection tools to help with this.
- Educate Customers: Educate your customers about the security measures in place and encourage them to monitor their credit card statements for any unauthorized transactions.
How Can I Accept Credit Card Payments For Free?
It’s not possible to accept credit cards entirely free of charge because credit card networks rely on fees for their services. However, you can offset these fees by applying a surcharge to credit card transactions or adjusting your prices. Alternatively, you can encourage cash payments by offering discounts to customers who choose this option.
Is There An App To Accept Credit Card Payments?
Several mobile apps are available for accepting credit card payments on the go, including Square, PayPal Zettle, PayAnywhere, Clover, and QuickBooks apps. Among these, Square stands out as the easiest to use and transport due to its compact card reader that conveniently fits in your pocket.
How Can I Take Card Payments Online?
Payment service providers like PayPal, Stripe, and Square enable you to receive card payments online. Simply create an account with one of these providers and incorporate a payment link for your customers to use.
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