How to Set Up Small Business Credit Card Processing

Are you looking to accept credit or debit card payments for your business? While the process may appear difficult, small business credit card processing is easier than it sounds.

Credit card usage has been on the rise, and this trend isn’t showing signs of slowing down. As of 2020, 79% of American consumers had at least one credit card or charge card, and experts are expecting that number to continue to grow. 

Needless to say, small business owners that aren’t accepting credit cards are leaving a lot of money on the table. If you want to keep up with modern consumers, you need to ensure that you have the systems in place to accommodate their payment needs. 

Doing that starts with evaluating different credit card processing services and selecting the right solution for your business.

Credit Card Payments and Your Business

One of the first steps to getting started with small business credit card processing is determining your specific needs. Ironing out your requirements will make it easy to evaluate credit card processing companies and figure out the best option for your biz.

To that end, below are some helpful questions that can surface your business needs

What Types of Credit Card Brands Do You Want to Accept?

Understanding what credit card brands to accept is very important for your business and customers. Credit cards contain their own unique set of rates and interchange fees which can be costly. As a business owner, you pay for the convenience of accepting a chosen payment method in order to accommodate the interests of your customers. Visa and Mastercard are standard, but then you also have American Express and Discover.

It’s important to note that each of these card networks have varying fees and policies, so be sure to consider them when deciding on the credit card types to accept. 

How Will You Accept Payments?

List the methods you’ll use to accept credit card payments. Are you doing them in person or online? Will you be accepting mobile payments or contactless payments like Apple Pay? Do you plan to take credit card payment info over the phone? What about online payments?

The answers to these questions will enable you to figure out what hardware and software you need to effectively set up and accept credit card payments. For example, if you’re a large retail business that focuses on in-store transactions, then having a robust point of sale system that integrates with your credit card processor and credit card terminals is a must.

If you’re selling online, see to it that your payment processor integrates with your ecommerce shopping cart.

There are many credit card processing solutions you can choose from. Depending on the industry, some payment types will serve as a default with additional options to expand payment collection methods from customers. Customers can make payments on your website or through a POS terminal next to the cash register.

You can process payments on your smartphone with a mobile card reader or you can type payments into a virtual terminal. Payment preferences are continuously changing so it’s important to know how customers want to pay as well as how your business wants to charge.

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How Much Do You Expect Sales Volume to Be Credit Card Transactions?

The number and amount you process are major factors that credit card processing companies consider when setting your rates. As such, you should understand your transaction volume before hunting for a merchant account service.

Step 1: Choose the Right Payment Gateway

The first step to small business credit card processing is setting up a payment gateway account— which is different from a merchant account provider. All your transactions, no matter what type, are channeled through a payment gateway. The payment gateway’s role is simply to decline or approve a transaction. Here’s a look at how payment gateways work:

  • The customer goes through the checkout process and pays for a good or service with their credit card.
  • Next, the authorization needs to be checked. The payment gateway service sends the transaction data to the merchant bank’s processor, who then routes the transaction data to the cardholder’s bank.
  • The transaction now needs to be verified. The cardholder’s bank will either approve or decline the transaction. Then it will pass that information back to the credit card processor. The processor then passes the information to the cardholder and the merchant.
  • For a card that was accepted, goods or services are delivered. The transaction is completed.
  • The customer’s bank sends the required funds to the credit card processor. The processor forwards the funds to the merchant’s bank. Once you research the different payment gateway options available to you, contact the one that’s right for your business to get started. Be sure to look for the following features when choosing a gateway account for your business.
  • PCI DSS compliant
  • SSL (Secure Socket Layer)
  • eCommerce integration
  • Report generation
  • Customer support

Step 2: Set Up Your Merchant Account

The second step to small business credit card processing is choosing a merchant account provider (your payment processor). This involves thorough research into the best payment processor for your business.

Some gateway service providers also include merchant services, but you should shop around before settling on that option. You should also note that some payment processors actually have gateway services of their own or have partnerships.

You want to find a processor that has all the credit card processing solutions you need to make transactions, and you want the best rates for their services.

Keep These Key Features in Mind When Choosing a Payment Processing Company

Not all payment processors are created equal. To figure out the right solution for your small business, be sure to take the following factors and features into consideration.

  • Digital application and rapid setup time. You operate in a fast-paced environment, so it’s important to partner with a processor that makes account and equipment setup quick and easy. 
  • Favorable pricing structure and low transaction fees. Ask about the pricing model of your payment processor. How much is their markup? What fees do they charge? Ideally, your processor should offer transparent pricing and clear details about their rates. Or better yet, choose a provider that doesn’t take a cut out of your sales. At Stax, you are charged a flat monthly fee for unlimited access to the direct cost of interchange rates
  • No ancillary or hidden fees (see below). Stay away from providers that tack on additional fees beyond credit card processing.
  • Fraud protection. You want a provider that looks out for you and helps prevent fraudulent transactions from taking place.
  • Supports the payment processing solutions you need.  Depending on your business, this may include integration with your POS system, EMV-compliant equipment, support for your shopping cart, POS terminal, virtual terminal, mobile card reader, etc.

Fees You Should Avoid

  • Termination fees
  • Customer service fees
  • Statement fees
  • IRS fees
  • Batch fees
  • Annual fees
  • Contract fees
  • PCI compliance fees

Step 3: Accept Credit Card Payments

Once your merchant account is set up, you’re ready to accept credit card payments. This can be as simple as logging into a software product or entering your customer’s payment information. Whatever solution you choose for your business, should be simple and easy to use.

In some cases, you’ll need to set up your equipment (i.e., POS system, credit card readers, etc.) Whatever solution you choose for your business, should be simple and easy to use.

If you don’t like the payment processing services you’re receiving after a few months, it should be easy to switch processors— unless you signed into a contract. Many contracts will have a hefty termination fee you have to pay in order to cancel. Try to get the fee waived or simply choose a processor that doesn’t have contracts.

Ready to Set Up Credit Card Processing for Your Small Business?

If you’re looking for the perfect payment processing solutions for your small business, you’ve come to the right place. Stax Pay offers subscription-based integrated payment solutions at a direct cost— without any markups, ancillary fees, or contracts. Request a Custom Quote today.

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