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. We’ll start at the beginning. In order to set up a merchant account, you’ll first need to consider a few things about credit card processing and your business.

Credit Card Payments and Your Business

When it comes to credit card processing there are many factors to consider. While you may think the process is difficult, small business credit card processing is easier than it sounds. In order to set up a merchant account, you’ll first need to consider a few things about credit card processing and your business.

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.

How Will You Accept Payments?

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 mobile phone 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.

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

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 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 Processor

  • Digital application and rapid setup time
  • Low transaction fees
  • No ancillary fees (see below)
  • Fraud protection
  • The payment processing solutions you need— shopping cart, POS terminal, virtual terminal, mobile card reader, etc.

Fees You Should Avoid

  • No termination fee
  • No customer service fee
  • No statement fee
  • No IRS fee
  • No batch fee
  • No annual fee
  • No contract fee
  • No PCI compliance fee

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.

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.

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.