As a business owner, payment processing is an integral part of your day-to-day. In fact, one of the most exciting moments in owning a business is receiving payment for a job well done. Whether it is your first transaction or your millionth, the thrill of having a customer appreciate your offerings enough to buy what you’re selling is a great feeling. That joy can quickly turn into sorrow if you’re not using the right payment processor.
Payment processing represents one of the biggest hard costs for businesses year over year. Knowledge of the payment processing services you use on a daily basis can help even the tiniest of small businesses accrue more revenue. Before you choose a payment processor or make the switch to a new payment processing services provider, here are 10 frequently asked questions about payment processing to help you make the right choice for your business.
How Do I Know Which Payment Processor To Select?
Selecting the right payment processor for your business doesn’t have to be difficult. In reality, deciding which payment processor to use depends primarily on two things. What payment processing services are best suited for your business and which payment processing tools will provide the best experience for your customers.
The first thing you should consider when looking for a payment processor is the platform’s ability to integrate with other necessary business tools. An integrated payment platform should not only help you accept payments faster and more efficiently, but it should also give you access to key features that can help you view and manage the health of your business. The second consideration is the cost. All payment processors charge different fees for credit card processing. Find a payment processing services provider that offers a simplified and transparent pricing structure for their payment processing platform. This will help you avoid getting caught off guard with unexpected processing fees or extreme shifts in expenses each month.
How Much Will Payment Processing Cost?
Regardless of the provider you choose, when you accept debit and credit cards as payment, you are always charged a fee for processing. The amount you’re charged for payment processing will vary depending on the payment company you choose to use. To date, the average cost of processing payments in the U.S. for businesses that do between $100,000 and $250,000 annually is between 2.87 percent and 4.35 percent per transaction. Bank-owned payment processors tend to be on the higher end while most third-party payment processors offer lower rates per transaction.
However, while these payment processing fees may vary from provider to provider, they are all based on existing fees, called interchange fees, charged directly by associated card companies like Visa and Mastercard for businesses to accept their cards.
Understanding how interchange fees work can be complicated, which is why Stax simplifies pricing for businesses wanting to accept a variety of payments through a flat subscription model. This allows businesses to access the lowest cost of interchange without complicated markups and helps businesses avoid paying more than they have to in payment processing costs.
Related: ACH Payment Processing for Small Businesses: What is it?
Will My Business Qualify For a Merchant Account?
In order for a business to qualify for a payment processing account, it’s important to check the requirements for your specific payment processing account application. Generally, your business will be expected to provide a business bank account, financial statements, business license, physical address, employer identification number (EIN), or sole proprietorship, and a completed application.
With Stax, the minimum requirements for a business owner to be approved for a merchant account is: a signed merchant agreement (application), previous processing statements, marketing materials, and a voided check. It takes 24-48 hours from submission for the application to be approved. If more documentation is needed, that could extend the timeline.
What Are The Payment Types I am Able to Accept?
Reports have shown that offering multiple payment channels to your customers equates to an increase in revenue generation. Offering customers the right easy-to-use payment tools at checkout allows your business to go beyond cash transactions expanding opportunities.
Mobile Payments: A mobile payment is a money payment made for a product or service through a portable electronic device such as a tablet or cell phone.
Contactless Payments: Touch-free payments made with credit cards and debit cards, key fobs, smart cards, or other devices, such as smartphones and other mobile devices, that use radio-frequency identification (RFID) or near field communication (Samsung Pay, Apple Pay, Google Pay, or bank application) for making secure payments.
eCommerce Payments: eCommerce (or electronic commerce) is the buying and selling of goods (or services) on the internet. With online payments expected to be around 700 billion in 2020, the simplicity and convenience of shopping and paying online is an ever-growing trend.
Virtual Terminal: A virtual terminal is a software application for businesses that allows them to accept payment with a payment card, specifically a credit card, without requiring the physical presence of the card.
ACH Payments: ACH stands for Automated Clearing House. This network coordinates electronic payments and automated money transfers between banks without using paper checks, wire transfers, credit card networks, or cash.
How Long Will it Take to Begin Accepting Card Payments?
Depending on the size and complexity of your business, it can take anywhere from merely moments to set up a pay-as-you-go account to 48 hours for an authorized merchant account. For more established companies taking the time (24-48 hours) to properly set up an actual merchant services account is necessary. Add 2-day shipping to that if the account requires a physical device.
Is Credit Card Processing Secure?
Businesses who want to accept credit card payments must implement safety measures, regardless of whether payments are being taken in person or via the web. When the proper safeguards are in place, credit card processing can be done safely and securely. In 2013 alone, businesses lost more than $700 billion due to credit card fraud. Using the right tools and systems can also help reduce the risks that automatically come with accepting a credit card.
Business owners can protect themselves against credit card fraud in many ways:
EMV Compliance: In late 2015, EMV, also known as a chip card or a smart card, became the standard for credit and debit cards across the country. The microchip technology contains better security features than those available for the long-used magnetic stripe credit and debit cards.
PCI Standards: PCI standards came in response to numerous data breaches among large and small businesses. In order to help companies detect, react, and prevent future data breaches these standards were developed.
Tokenization: Tokenization takes sensitive data and replaces it with a randomly generated string of characters that can then be linked back to the original data only by an authorized party.
What is PCI Compliance?
PCI Compliance or the Payment Card Industry Data Security Standard is an information security standard for organizations that handle branded credit cards. The PCI Standard is mandated by the card brands but administered by the Payment Card Industry Security Standards Council.
No matter the size of your business, you must comply with PCI standards. They are put in place to ensure all companies maintain a secure environment to take credit card transactions reducing the risk of fraud. Here at Stax, we ensure that you are PCI compliant within 30 days of signing up with us (at no cost to you). We believe that it is our job to ensure your business is as secure as possible.
Related Content: Enterprise Payment Processing – Everything You Need to Know
How Much Customer Support Will I Be Able to Access?
Customer support and service vary from business to business. Some businesses are only available via phone or email only. This is a common issue for business owners trying to obtain quick customer support for a payment processing issue. Not being able to collect payments for a few hours or a day could be crippling to a business that is counting on that revenue generation.
At Stax, we put businesses first and focus on delivering the best possible customer experience to every business. When you reach out to us by phone or email for all inquiries and technical support, we have a real, in-house team of experts ready to work with you to find the right solution. We also provide additional resources and tools that help businesses to address any unique challenges and questions they may come across.
When Will I Receive Funds in My Bank Account From the Credit Card Transactions?
The time it takes for a business that accepts a credit card payment until the funds are deposited into the businesses’ bank account can vary depending on the type of merchant account the business owner uses. Payment can take anywhere from 24 hours or up to three days to process and reflect in a business’s bank account. The reason for this time is because the transaction process goes through a number of steps to get from one bank account to another.
What is the Difference Between a Gateway and a Processor?
A payment processor communicates transaction information between the business, the issuing bank, and the acquiring bank. A payment gateway is primarily used as a tool for e-commerce or card-not-present transactions. In other words, it is essentially a point of sale terminal for online transactions. Another way they differ is that the payment processor enables the transaction, whereas the payment gateway communicates the approval or the decline of the transaction between the business and the buyer.
Stax is ready to answer any questions you may have and help you maximize our state-of-the-art payment solutions and services. To learn more about Stax’ payment processing services reach out to us for a free consultation today.