Allowing customers to pay via credit poster can make wield cash flow less nerve-racking and eliminate the delays associated with waiting for see payments. If your business international relations and security network ’ t yet accepting citation card payments, changing that may be easier than you think .
Reading: How to Accept Credit Card Payments
- Accepting credit card payments for your business can make managing cash flow easier and potentially boost sales.
- More Americans are relying on credit and debit cards as a payment method instead of cash or checks.
- You can accept credit card payments whether you run a large business or a small one.
- Setting up your business to accept credit card payments doesn’t have to be complicated.
Benefits of Accepting Credit Card Payments
Allowing your customers to pay with credit cards can yield a number of advantages for your business that could lead to greater growth. According to the National Federation of Independent Business, there are many benefits to accepting credit cards .
major reasons to accept credit cards include :
- Improving cash flow, since it can speed up payment times and reduce delays
- Legitimizing your business in the eyes of customers
- Potentially boosting sales volume, since your customers will have more ways to pay
If you ’ re still not sold on the idea of accepting cards, consider the increase of credit tease payments compared to early payment methods. inquiry from Deloitte shows that credit cards made up closely $ 4 trillion in requital book in the United States in 2018. From 2016 to 2018, credit batting order transactions increased while the share of Americans using cash to pay declined .
That tendency may continue if necessitate for contactless and/or digital payments besides rises. As a result of the 2020 economic crisis, for example, 64 % of small businesses said they were trying to steer clients away from using cash and checks in favor of digital payments, such as citation cards. Credit cards could become an even more common payment method acting as Americans move a greater helping of their transactions online—even when buying from brick-and-mortar businesses, such as local anesthetic restaurants offering manner of speaking services or stores with curbside tone arm .
What Types of Businesses Can Accept Credit Card Payments ?
The abruptly answer is that virtually any kind of commercial enterprise can accept credit cards. For case, you could choose to accept credit cards if :
- You run a brick-and-mortar business
- Your business operates completely online
- You have a traditional small business with employees
- You’re a sole proprietor with zero employees
- You’re an independent contractor or freelancer
- You have a mobile business (such as a food truck or dog grooming service)
In any of those scenarios, accepting credit card payments could work in your favor if it makes it easier for customers to pay. Deciding not to accept credit cards in your clientele normally comes down to personal choice, rather than the type of business that you run .
If you decide to accept credit poster payments, federal law requires that you verify that those payments are authorized by the customer before processing them. That is typically done behind the scenes, and about instantaneously, by a payment work service.
How to Accept Credit Card Payments
If you ’ re cook to accept credit batting order payments for your modest business, then you ’ ll indigence to follow a few steps. But once you get a system set up, it ’ s relatively comfortable to oversee and manage .
1. Decide How You ’ ll Accept Credit Card Payments
The first step is determining when and how to accept credit batting order payments. For example, you can take citation batting order payments :
- In person
- Using a mobile card reader
- Over the phone
The choice that you choose may depend on the type of business that you run. For model, if you have a brick-and-mortar retail store, you may accept credit cards in person at checkout or online if you ’ ve set up an ecommerce storehouse. But if you run a mobile business, using a mobile card subscriber may be the best option .
You ’ ll besides need to decide which of the major credit poster networks ( Visa, Mastercard, Discover, or American Express ) you want to accept .
2. Choose a Payment Processing System
When a customer gives you their credit menu to pay, there ’ mho more to it than plainly swiping or inserting the poster. The customer ’ s wag and history details have to be reviewed and processed electronically so that the payment to you can be authorized. All of this happens digitally behind the scenes in a matter of seconds, but you need to hire a payment central processing unit to make it all work .
If you want to accept citation card payments, you can do it one of two ways : merchant accounts or payment service providers. A merchant report is an account that you open with a bank to accept credit wag payments. Payment service providers are companies that allow you to accept accredit tease payments without setting up a merchant explanation .
Of the two, a payment service provider may charge lower process and transaction fees. So it may work well for you if you have a newer business or relatively little credit card payment volumes. But if you do a big volume of sales from credit rating cards, then a merchant account could be an easier room to manage your credit card payments .
When comparing merchant accounts and payment service providers, consider whether you have to sign a long-run sign and what fees you ’ ll pay for credit card work.
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3. Get Your Credit Card Payment Software and Hardware in Place
once you have a method of processing credit card payments in place, you may need to update your point of sale software and hardware to actually accept them .
For example, if you run a brick-and-mortar clientele, you may need to purchase check software to accept card payments or install a card subscriber that ’ mho EMV check -enabled at check. Some payment servicing providers will besides supply the equipment that you need to get set up for accepting credit circuit board payments in-store or via a mobile card reviewer .
How to Accept Credit Card Payments Online
many small businesses are now online-first, or even online-only. Whatever character of business you own, giving your customers the ability to pay with their credit menu on-line provides them with more convenience and can boost sales. Ecommerce shops, restaurants that accept orders online, and digital services companies wouldn ’ deoxythymidine monophosphate be able to function without this capability .
Providing this serve to your customers is not unmanageable. If you plan to accept credit cards online, then you ’ ll besides need to set up a requital gateway for that. Again, this may be included with your merchant score or payment serve supplier plan .
You will need a digital shopfront, and the most common way of obtaining one is to sign up for an report with an ecommerce platform provider. Credit tease payments are such an important function of contemporary ecommerce that all of the major ecommerce chopine providers will allow you to take credit cards as a phase of payment .
good be aware that there is broadly a cost associated with this. Online credit card transactions typically have higher process fees than in-person transactions.
Using Credit Cards safely : Tips for Small Businesses
Despite the advantages of accepting credit cards for your small clientele, some risks are involved in giving customers this option. The most outstanding are :
- Fraud. Some credit card systems are safer than others, and there have been instances in which businesses have been affected by credit card fraud.
- Processing fees. If your margins are very small, the processing fees associated with accepting credit cards can easily add up to a major business expense. Small businesses with thin margins will need to assess whether accepting credit cards makes business sense.
- Chargebacks. A chargeback is a disputed transaction that customers initiate when they aren’t satisfied with a purchase. Even if you’re in the right and the customer is not, it’s difficult and costly to dispute chargebacks.
small businesses that want to accept credit cards but besides want to avoid these risks should be wary, and should follow best practices for citation tease payment systems :
- Only use approved, well-known software and equipment. There are lots of different payment processors on the market today, but make sure to check the credentials of the company that you choose to work with.
- Don’t store customer credit card data. Although you are allowed to do so, it makes you very vulnerable. It’s better to have a use-and-delete process.
- Train your employees to handle credit card data and spot potentially fraudulent transactions. This can save you a lot of time in the long run.
- Verify shipping and billing addresses. This can dramatically reduce the potential for fraud.
- Be extra vigilant when accepting credit card payments online. With this kind of payment, if your company accepts a bad or stolen credit or debit card, then the total liability of the loss is yours.
Pay Attention to Credit Card Payment Processing Fees
Accepting credit cards through a merchant report or a payment military service provider international relations and security network ’ t detached ; each charges servicing fees to facilitate those payments. As you get ready to accept credit calling card payments, consider how those fees factor into your operate and overhead costs .
If the fees are going to take a serious bite out of profits, you might compensate by increasing prices for your products or services. Or you could add on a surcharge or convenience tip for processing accredit poster transactions below a certain dollar sum. But be surely that you ’ re aware of state and federal regulations on credit poster surcharges to avoid any illegal practices .
Can Companies Refuse to Accept Credit Cards?
Yes. however, it ’ s not a great theme for the business. Any clientele is within its rights to refuse a method acting of payment. The question is whether this will affect their customer base by doing therefore, specially as the use of non-cash payments is growing fast .
Can You Accept Credit Card Payments Without a Merchant Account?
Yes. You can accept accredit tease payments without a merchant bill by using a third-party central processing unit. Third-party processors work through a different commercial enterprise model, which allows you to accept these payments into a standard business report. This can provide an easy way for very small businesses to accept credit card payments .
How Much Do Small Businesses Pay in Credit Card Fees?
Credit circuit board work fees will typically cost a clientele 1.5 % to 3.5 % of each transaction ’ mho total. For a sale of $ 100, that means you could pay anywhere from $ 1.50 to $ 3.50 in accredit card march fees. For a minor business, these fees can be a significant expense. however, most businesses find that this is more than made up for by the increase in sales associated with taking accredit cards.
Read more: What Is A Good Credit Score? | Equifax®
The Bottom Line
present, it ’ south unusual to find a small business that doesn ’ thymine accept credit cards. This is because giving customers as many options as possible when it comes to payment can drive sales and boost customer satisfaction. And while there are some risks and costs associated with accepting credit card payments, these by and large are more than made up for by an increase in convenience and sales .