Getting Started with Payment Processing



If you’re new to small business credit card processing, it can seem a bit daunting. Don’t let the fancy terminology and technology overwhelm you. Once you get a few important concepts under your belt, you will be accepting your customers’ payments like a pro.

The First Step

Before you can take plastic credit or debit cards in your brick-and-mortar business or online, you need to set the stage. That means setting up a merchant account through a payment processor. This will be separate from your business bank account. In effect, it serves as a contract among three parties: you, your credit card processing company and your merchant bank for the purpose of dealing with customer payments.

Getting the Equipment

Now that you know who the players are, you need the props and materials. In other words, you must procure the hardware and software that is involved in swiping and processing customer payments. One important thing to keep in mind is that all of this must comply with payment industry security standards, which protect both you and your credit card processing company as well as the people who buy your products and services.

Choosing Your Hardware

Your point-of-sale (POS) terminal will be the mechanism you use to take payments when your customer is physically at your register. In addition, a modern POS will include capabilities that allow you to track sales and inventory, handle exchanges and returns and even reward loyal patrons.

When researching your POS options, you will soon discover that they vary widely. Choosing the system that will best suit your needs means understanding what you want it to achieve. A simple terminal or reader will allow you to accept payments, but you may also want a software component that allows you to run your store and market to your customers. Simple software often comes with a credit card reader, but you may want more bells and whistles depending on how you intend to use technology to grow your business.

In terms of hardware, let your business’s size and scope determine what you select. For instance, a small enterprise might need only a tablet equipped with a card reader that integrates into a cloud-based POS platform. On the other hand, a large restaurant will probably need a POS terminal, a card reader, a receipt printer and a kitchen printer – all of which work together.

If your business takes you on the road or you want your POS to have flexibility to move about your location, a mobile point of sale may be right for you. Accepting payments with a mobile reader has several advantages. For one thing, you can email customers receipts rather than printing them. Also, tasks such as sending out invoices, running inventory reports, reviewing employee performance and managing customer accounts can be done from anywhere as long as you have a cellular signal.

When deciding which POS and processing company to use, be sure to look for a solution that:

  • Is easy to use
  • Is cost-effective
  • Has responsive customer service
  • Integrates well with other software you already use
  • Automates processes as much as possible to minimize errors and reduce the time you spend
  • Offers transparent pricing free of hidden fees
  • Provides freedom and flexibility to take payments anywhere
  • Tracks sales, inventory and customer behavior

Once you have come up with a few viable candidates, you can come to a clear understanding of what features are indispensable to you and which you might be willing to forego.

Accepting Online Payments

These days, more and more businesses operate online only or have a thriving internet marketplace in addition to their physical store. With each passing year, it becomes more financially desirable to participate in e-commerce. When you decide to take the plunge, you need to figure out how you are going to accept card-not-present online payments.

Believe it or not, you probably already have the majority of what you will require. If you have a business PC or laptop connected to the internet, you can easily turn it into a virtual credit card processing terminal.

Adding a payment gateway enables your customers to pay for their items right on your website and to create an account that will make future purchases easier. You also have the option to bill customers by email via click-to-pay email invoicing or to set up recurring billing.

Taking Mobile Payments

Since virtually every potential customer has a smartphone, many businesses are choosing to enter the realm of accepting mobile payments. Once you are equipped and ready to accept mobile payments, customers have the option to swipe or dip their traditional card, or they can make a contactless or NFC payment by putting their phone near your or terminal that’s enabled to accept NFC payments.

You may also want to take advantage of the smartphone phenomenon by using a POS that can alert customers on their phones regarding a flash sale or promotion when they get within a mile of your location. Using push messages and text alerts can be effective since impulse buying makes up a significant chunk of customer purchases.

No matter how you slice it, your business needs a healthy, ongoing flow of income if you have any chance of succeeding. Adding different ways to accept your customers’ payments helps to ensure that you capture as many sales as possible, and obtaining payment processing software and equipment should be one of your first steps.