Are you a small business owner who is looking for ways to accept credit card payments? If so, you’re in the right place to learn how. Also, we’ll provide a few golden rules for choosing the right payment processing solution for your business.
Why Learning How to Accept Credit Card Payments Is Worth It
As a business owner or side-hustle solopreneur, credit card payments are your most common route to generating revenue.
Credit and debit cards are safer to use because of personalized chip technology. And people hardly carry cash anymore.
But it’s not just that. Millennials love storing payment information in phones, watches, and digital wallets. It’s still using a credit or debit card to pay, but lets a gentle wave of the hand or wrist make a payment now. So simple—and most of us like it simple.
Let’s face it, buying things is easier today. And, with the rise of online shopping, if you can’t accept credit card payments in their various forms, how are you even in business?
You know that already though; that’s why you’re here. You’re here because you want a quick and easy guide to setting up a way to accept credit card payments. Fortunately for you, that’s exactly what comes next.
The Investment Needed to Start Accepting Credit Card Payments
First you need to decide how you will be accepting payments. Will your business
- take payments in person?
- take payments online?
- or need to handle both in-person and online credit card payments?
While it might seem a minor difference at first, in-person payments incur different fees and require different technology than online payments.
If you’re going to take in-person payments, you’ll need the equipment to scan cards and a point of sale system. A good system will help you track inventory and more, beyond just being able to ring up sales at the register.
For online stores, you’ll need a payment method provider (or merchant services provider for businesses that do plenty of in-person and online business) if your website or hosting provider doesn’t include that.
Even then, a good payment method service will open up other ways of taking payments in addition to credit cards. But you don’t want to be stuck only able to accept PayPal on your web store—that can put a stranglehold on profits.
Keep in mind online transactions can cause higher fees. You’ll want to pay close attention to not only a payment processor’s monthly fees, but also their transaction fees or interchange rates.
Now that we have your investment cleared up, let’s talk about what steps you need to take to put everything in motion.
4 Steps to Accepting Credit Card Payments
You can get up and running on accepting credit card payments in just a few easy steps.
Step 1 – Decide How You Want To Take Payments
When you set out to start your business, there are so many moving parts. It can be tempting to just get the doors open and get a few customers under your belt.
But you don’t want to miss out on money because you can’t accept the payment methods that are most convenient to your customers.
This step depends on the type of business that you run.
Like we mentioned in the section on necessary investment, this will dictate whether you can get by with a simple payment method provider for your web store or online service or if you need a full suite of merchant services or a POS system for your brick-and-mortar or pop-up store.
Keep an eye out for other payment methods that a provider allows for, whether that’s mobile payments or tap to pay sensors for in-person sales or the ability to accept, say, Bitcoin in addition to credit cards.
Often, more ecommerce-focused providers don’t cost too much as far as a monthly bill, but may have higher processing rates. That’s fine for low-volume businesses. But if you’re planning on a large volume of monthly transactions, merchant services could offer you better rates.
Use those above links to guide you to what software or services will fit your business best.
Step 2 – Setting Up Your Credit Card Hardware
This part of accepting credit card payments is straightforward.
Now that you have the best way for you to process credit card payments, you’ll need to integrate it with your storefronts. Providers will help you with this process, but it’s important to know a couple things going in.
If you’re mostly sticking to in-store sales or want to do both in-person and online payments, you’ll need the right hardware.
If you’re only sticking to online sales, you can skip to the end of this step.
Your store or in-person operations will need card readers at the very least. You may opt for a full point-of-sale system, or you could use a mobile device like a phone or tablet with a card reader attachment. Be aware you’ll need hardware that can read EMV chips on cards for better security.
Just make sure everything syncs up and plays nicely together. That includes any inventory tracking, order tracking, and customer database tools or software you have in place, which applies as well to ecommerce-only outfits.
Step 3 – Prepare to Take Credit Card Payments Online
Your ecommerce store can be up and taking payments by credit card in no time.
Before selecting a payment processor, you’ll have to make sure it can work with the platform upon which your web store is built. This may also be the time where you look into building your first web store, upgrading it, or getting someone else to build it out for you.
Some ecommerce site builders and providers will include payment gateways and processors, but it’s to seek out other options that can open other doors beyond credit card payments and, more importantly, offer you better fees or complimentary services.
A great payment service provider can even help you customize your web store’s shopping cart and offer amenities to customers like recurring billing of their credit card for subscriptions. Not every payment method provider does this, so keep an eye out for that if you want to be able to accept recurring credit card payments.
Step 4 – Watch Your Fees
This step is a big, big, big, part of the process. When you take a credit card payment, it’s going to cost something.
Every provider is different and some charge more than others. To prove our point, there are business owners that shuffle between companies for the best rates all the time.
That’s not saying you should, but these fees are that important to keeping down costs for your customers and bottom line.
Average interchange rates fluctuate all the time, but it’s safe to bet it’s close to 1.8% of each transaction, plus 10 cents.
These fees can take considerable chunks out of your profits if you’re not getting the best rate or they start piling up and gouging your profit.
You may have to adjust prices, add a surcharge for certain payments (within regulatory compliance), or get creative with another method that keeps your customers and accountants happy.
The more you understand how fees, percentages, and the fine print works, the more prepared you are to accept credit card payments with confidence and start building your business.
Next Steps
It’s obvious isn’t it?
This is the point where you get off this page and start collecting credit card payments today.
Set it up now. It won’t take long. If you don’t, you’re already missing out on the security and added convenience your customers get. Plus, it just makes good business sense to give your customers as many payment options as possible.
By following the simple steps in this guide, you can be up and running with online and storefront payments by credit card in no time. And, don’t forget, if you have any questions along the way, come right back here, we’re here to help.
