Credit Card Payment Processing 101
Article by Chris Costi, Last update at November 25, 2019
What to check and what to look for when picking the Best Credit Card Payment Processing
All merchants who have a business on or offline, need to be able to accept credit or debit cards in order to maximize their sales. In this day and age, card payments have become the norm, and all businesses have no choice but to decide on which payment processor to use. How do you go about choosing the right one for your business? There are hundreds of options available, choosing which one to use, can be a daunting task.
The first thing to consider when choosing a credit card payment processor for your business in which one offers the services best suited to your business. If you are a small company you will need to ensure that there are no binding contracts with high cancellation fees and that the monthly charges are compatible with the industry average. You will need to be able to accept cards online and maybe instore as well. With this in mind, you will need a payment terminal that will also allow you to take payments via mobile phone and through your POS system or tablet instore, or from anywhere there is an internet connection. (Clover is a great example)
The criteria for choosing a credit card processor are first, how much the equipment and set up costs are. Some companies might offer software that is compatible with the equipment you already have, whereas others might charge you more initially for new equipment. Once you have studied and accepted the percentages charged per transaction and the monthly and annual fees, find out if you need to sign a contract and what the cancellation fees are.
This is important if you are a new or small business, as canceling a contract could have you paying hefty charges even after your business closes down. Some payment processing companies publish their rates online and these are usually given in packages which will depend on the size of your business. Over and above these monthly or yearly charges you will also get charged for the following:
- Initial fees which could involve setting up and software or hardware
- Installation fees
- PCI compliance fees for a secure environment
- Chargeback fees, for canceled or refunded transactions
- Monthly fees to cover account management and technical support
- Interest and flat rates per transaction
- Monthly sales processing limits, check standard sales volume
- Cancellation fees
The whole point of using a credit card payment portal is so that you can receive all types of payments from your customers. Make sure that the card processing terminal has EMV capabilities and that you are able to accept all types of cards, including gift cards through you payment terminal, online, via mobile or PC, from wherever you are. Once you are happy with the charges and contract situation, you will need to find out what the additional features and benefits, are offered. Most reliable payment processing companies offer customization options, third-party integrations and reporting and analytical tools.
Some credit card processing companies specialize in smaller businesses (Flagship Merchant Services) or specific types of businesses like a High-Risk Processing like Payment Cloud. Most processing companies can handle brick and mortar stores as well as online e-Commerce stores. If you need to cover mobile services, phone orders or mail orders, talk to a sales representative to make sure that you are covered. It is also wise to take into consideration what your needs will be as your business grows and to make sure that the payment processor you choose will allow you to grow without you having to make any expensive changes. Most credit card processing companies offer various types of customized accessories like card readers and payment terminals.
Find out how much you will have to pay if the need arises for extra units. EMV terminals are now widely used and it is wise to have this capability right from the start. This will give you the ability to accept the chip card for greater fraud protection. NFC, Near Field Communication technology, is another form of payment that allows your customers to pay with digital wallets using smartphones or mobile devices.
This technology requires a contactless POS reader that emits a signal and can be used for Google Wallet, Android Pay and Apple Pay, to name a few. Having the ability to accept all types of payments, with all the new technology that is available today, is a huge plus. All businesses should continue updating their system to accept the latest payment processing technology such as digital wallets and EMV chip cards. Apart from being up to date, these new forms of payment also offer the most secure way to shop online.
Are all business processing needs are the same?
With brick and mortar retail stores, it is important to have a good Point of Sale system. What these costs will vary depending on what the requirements are, for your specific type of business. With your POS system, you will get mobile card readers that are light and portable. If you have an online store as well, your payment processor should be able to coordinate all payments received. For mainly online e-Commerce businesses there are companies who specialize in this field with custom website creation and virtual check out. Some of these payment processing companies also offer data analysis of sales and customer data as well as inventory management software through 3rd parties. There are also systems that are specifically optimized for shopping through mobile devices.
Mobile vendors have specific challenges that need to be met. For those that are on the road, payments often need to be accepted using a smartphone or tablet. Some might require a mobile card reader and others might need a system that allows users to manually enter credit card numbers without a reader. Take all your requirements into account and make sure that the card processing company you choose will cover your needs.
No one likes to lose a sale and it is essential that you cover all the possibilities that might arise for your type of business. For smaller businesses, you will be able to find credit card processing companies that offer free apps to get you started. Small businesses can often save money by working with card processors that have lower volume transaction limits or specialize in small business or startups. This is great for beginners, but you might need to take into account how fast your company could grow and if the credit processing company you choose, can handle the growth.
One of the most important things a merchant services company can offer you is customer support (Our pick- Leaders Merchant Services) . Even with the most advanced card payment system, things can go wrong and it important for you to know that you will receive support through several means of communication with the company.
Top processing company’s offer 24/7 phone support as well as email and live chat capabilities through their website. Due to security enhancements, payment processing software needs to be updated regularly, most companies do not charge for this and it is done automatically via the internet. Cloud-based payment processors also give you the capability to accept payments offline, and then to have all the data synced with your system, once the connection is re-established.
