Processing credit cards could be key to the success of your business. Fewer people carry cash these days, and your business needs to remain competitive. Even industries that were once reluctant about accepting credit card transactions have begun to see the consumer demand growing. Every business needs to be able to appeal to its consumers’ need for convenience and accept credit cards.
While every business can benefit from processing credit card transactions, there are a few that will be able to see the advantages immediately. These include:
Government agencies are seeing the need for being able to process credit card transactions, checks, and other payment methods like Apple Pay. Sectors that deal with individual transactions often need to be able to provide convenience and ease of use for the following:
These are the most common types of businesses seeing the need to accept credit cards. Retail businesses see the greatest demand for multiple payment options. Your business needs to cater to the wants and needs of the customer.
For example, if you only accept cash and a customer wants to pay, but they only have a credit card, you’ve lost a sale. If your business caters to the younger population, then it’s important that you get as digitally savvy as they are and offer the payment solutions they need.
Grocery and Supermarkets
Grocery stores typically have unique needs to consider when it comes to processing payments. Many of these stores accept EBT payments, which means that they must be processed accurately and keep the records of those transactions. This is in addition to the usual card payment processing needs that you’d see in a retail environment, including credit cards, debit cards, gift cards, and more.
The hospitality business can benefit from credit card processing, especially when it comes to in-room services, tips, spa services, add-ons, room service, and more. When you offer your guests the level of convenience of using their card to pay for these services, they will be more likely to get that massage or room service.
Does your business need a merchant account to accept credit cards? Contact us today.
Many business owners think that being able to accept credit cards is simple. However, there are many elements that go into the process, and it’s important that you understand how it works.
A payment processor is a company that takes care of the transactions involved in customer purchases. They communicate and relay the information from your customer’s credit card to your bank and the customer’s bank.
The payment processing company also checks for security measures to make sure that the data on the credit card is correct.
A merchant account allows you to accept the money from a customer’s credit or debit card. It acts as a holding place after the transaction has been completed and before the funds are sent to your business bank account.
The payment gateway exists on a website and connects the payment processor and merchant account to the credit card companies or the customer’s financial account. Without a payment gateway, you cannot complete the transaction.
Payment processors and merchant accounts are connected through the payment gateway.
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Merchant accounts can be expensive if you don’t know what you’re looking for. There are a few different pricing structures you should consider if you want to be able to accept credit card payments, including:
The zero-fee pricing structure offsets processing fees by giving customers a choice to pay the fees associated with the transaction instead of the merchant. To avoid paying the fee, customers can choose other methods like paying cash.
This structure allows you to keep costs low and pass savings onto customers instead of raising the prices on products or services to cover the processing fees. If you live in an apartment or rent your home, you may find that there is a fee associated with paying your rent using your credit or debit card. This is exactly what the zero-fee pricing structure for merchants is.
Pricing models typically do not disclose the interchange rate. The interchange rate is the rate that the merchant service provider will pay to the issuing bank in order to continue with the transaction process.
The interchange-plus model adds a constant margin on top of the interchange rates. This allows merchant service providers to price accounts fairly so that merchants who process higher volumes pay more fees. Smaller merchants are not penalized for processing lower volumes of sales.
Tiered rates organize cards into tiers and charge the processing fees based on the tiers they fall into. Tiers are typically determined by the provider.
This means that if your merchant account provider decides to put the most popular types of credit cards in the most expensive tier, you might not understand their reasoning behind the groupings and end up paying more.
The billback method is one of the most confusing billing methods in the industry. It’s also known as Mixed Rate or Enhanced Reduced Recover (ERR). Using this pricing, you will be charged a low, flat fee for each transaction.
However, since different transactions and card types come with various fees associated with them, the processor recoups the fee difference by charging you the difference on your next statement. You will end up having to save two months of statements to understand and track your fees.
Flat rate models charge a percentage on top of the interchange fee for each transaction. No matter which card type is used, you will be charged the same percentage.
While flat rate seems like a desirable rate, it can get more expensive the more you process. Cards with low interchange rates will be charged the same percentage of those with higher interchange rates, which can become expensive.
Whether you’re looking for an eCommerce credit card processor or a retail credit card processor, it’s important that you understand that not all credit card processors are created equally.
While fees should be an important factor, what’s more important is how you understand those fees. You should also consider things like the level of service, integration, and security. Here’s what to look for when you’re searching for the best online credit card processors:
Choosing a processor that works with all major credit card brands and multiple payment types is crucial.
Your payment processor should offer technical support for you when you need it. Whether this means an available agent 24 hours a day or forums and e-guides that can help you with common problems is your choice. However, make sure you are comfortable with the level of support your website credit card processor can offer you.
Processing and authorization are critical, which means that your credit card processor should offer you their complete availability to make sure these tasks are performed speedily. You should also consider prompt payments so that you’ll have faster access to your money.
Security and Compliance
As a business owner, you don’t want to have to worry about data breaches. The top credit card processors will offer you security, which meets all industry standards for PCI compliance.
Accepting credit cards from your customers means that you’re responsible for the handling of their sensitive information. PCI stands for Payment Card Industry, and it’s a set of standards that are put in place to protect customers’ information and ensure the proper security measures.
In order to become PCI-compliant, there is a short questionnaire that you have to complete every single year. If you’re not compliant, you can be charged a non-compliance fee from the credit card companies. This fee is not associated with your payment processor.
EMV is the chip card technology that we have on our credit and debit cards. This chip is an added security measure. As you may know, magnetic strips store the information on the card, which means that this information can be copied.
Chips, however, encrypt the card information every single time that the card is used so that your information cannot be pulled from the card to make unauthorized purchases.
All businesses that accept credit cards are required to accept chip cards. If you’re not EMV-compliant, you will be liable for fraudulent activity.
As you know, not all businesses are the same, and not all will have the same needs. Your payment processor should understand this and offer you the versatility required to meet your business needs.
While accepting a variety of payment methods is crucial, you should also consider easy integration with your existing hardware, software, and other technologies.
There are some things that can be difficult for businesses when it comes to finding a payment processor.
This includes the transparency of fees and doing business together. You should work with a payment processor that is transparent about the fees and charges so that when your bill arrives, you will not be shocked.
Also, you should know the fees upfront so that you can determine whether or not accepting credit cards is right for your business.
Length of Contract
Being locked into a long-term contract with the wrong credit card processor company means that you could be faced with an expensive cancellation fee if you want out.
While your relationship may start out well with your card processing services provider, they might change the way they do business down the line as the needs of your business change.
It’s important to find a credit card processing business that can evolve with your business and provide you with any of the necessary improvements.
While credit card processing should be one of your main priorities, you should look for a variety of payment processing methods available from your merchant services provider. This should include NFC, EMV, checks, debit cards, rewards, and gift cards.
You should also consider how easily your processor can integrate with your existing equipment, including your POS systems.
If you’re looking to process card payments for your physical business, some processors will ask that you rent or lease their equipment. This means that they will be tacking on more fees to your bill. Instead, look for a processor that can integrate with your existing equipment and offer solutions for payment processing that doesn’t require you to spend any more money.
Choosing the best payment processor for your business is critical to its success.
To work with a flagship credit card processor that offers you all of the above and more, contact us today.
Working with a payment processor who understands your industry and the needs of your business is your best bet to getting approved for a merchant account.
Applying for a merchant account is similar to applying for a loan and a job. A merchant account will require you to share financial statements, processing history, and even a cover letter.
Different companies will have different requirements, so it’s important to do your homework and be able to provide them with the right documentation that can convince them to give you an account.
To apply for a payment processor, contact us today.
Effective card payment processing is about more than just being able to accept transactions from your customers. You need to work with a processor that can offer you sensible payment solutions to accommodate your customers’ needs. By accepting credit cards, your customers will stay happy without worry.
We can help you meet the specific needs and goals of your business through cost-effective, simple, and secure credit card payment processing. We offer the best solutions with competitive rates, no matter what type of business you have.
Florence Carpenter is passionate about ensuring that the process of opening merchant accounts is as straightforward as possible. She graduated from the University of Michigan with a bachelor’s degree in Marketing.
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