You have probably known for a while that accepting credit card payments would be beneficial for your small business. Most store owners find that it increases sales, boosts loyalty and brings more customers through their doors. Going from knowing these advantages and actually taking plastic is not as hard as you think.
Do Your Research
It probably goes without saying, but adding this feature to your business is a process that should be very intentional. In other words, you should not pick the first random company you find online. Perhaps your most important job is to determine what your business needs. Is your particular customer base apt to provide you with a high, moderate or modest volume of monthly credit card transactions? Will you be doing all of your payments in person at your physical store, or will some take place over the phone or via online e-commerce transactions? Does your business lend itself to a stationary countertop credit card terminal, or would you be better served by a mobile card reader that works in conjunction with a tablet or smartphone?
Once you have arrived at solid answers to these questions, you will be better equipped to choose your merchant account provider. This is the company that will administer the bank account that makes it possible for you to accept credit card payments and fronts you the money – minus fees – rapidly so that you can keep your cash flowing.
Many merchant account providers also sell or lease the point-of-sale (POS) hardware and software you will need in order to make these transactions. As you research various merchant account providers, take careful note of all fees they expect you to pay, and make sure the POS equipment they provide will work well with the third-party software you may already use for tasks such as accounting and inventory management.
If you plan to do business online, you will need to set up a payment gateway. This is your online POS that enables your customers to securely enter their credit card information from their personal computer or mobile phone. In many cases, you can use the same merchant account for your e-commerce side. Be sure to ask your provider if this is possible.
There is not one set fee that every business pays to accept credit and debit cards. These charges vary widely according to the type of business you own, the merchant account provider you choose, your customer’s credit card company and how you collect the payments. The following is a sample of some of the fees you may pay:
- Flat per transaction fee
- Fixed percentage of the sale
- Initial setup fees
- Monthly, quarterly and/or annual fees
- Purchase or rental fees for your credit card terminal and other equipment.
Although some of these fees are set by the credit card companies, others vary and may be negotiable. For that reason, it is vital that you select several viable options and carefully examine all documentation and contracts before making a commitment to the best one.
Once you understand your various options and your rights and responsibilities as a merchant, you can begin to accept credit cards. Once you do, your business will run more smoothly and your customers will be happier. Best of all, you will probably see increased sales and enhanced credibility for your store. In the end, everyone wins.