Easy Steps on How To Get Started With Credit Card Processing

One of the most common misconceptions about processing credit card payments is that it’s nearly impossible for a payment processor to work with a small or high-risk business. This statement might be true for commercial processors. However, there are literally dozens of private companies in the country that process card payments for a wide range of at-risk clients.

Working with a high-risk payment processor is generally the same as working with a commercial one. The applicant will still need to submit financial statements, licenses, certifications, and credit history reports, along with any company-specific forms.

Although, SMBs should be extra careful when working with high-risk payment processors. Some disreputable companies trick unsuspecting newbies by offering them seemingly amazing packages and plans. No matter how desperate you are to work with a payment processor, always be objective. And if the offer’s too good to be true, then it probably is.

Still on the fence about whether a payment processing system’s really worth it? Keep reading! This article will cover everything you need to know about how your small business can be set up in the credit card payment network to start accepting card payments as soon as possible.

Is a Payment Processor Worth It?

The first thing business owners need to do is decide whether they’re willing to push through with the payment processing system application. The process will be time-consuming and taxing. If you’re not 100% sure that you want to equip your business with a POS machine, you’ll likely have trouble getting favorable results.

To help you decide, here are the top three benefits of having a card payment processing system:

Adaptability to Market Needs

If you’re planning to scale your business and broadening your target market, we highly recommend expanding your business’ payment options. Studies show that more than 80% of Americans prefer card payments over cash. If you don’t adapt to the market’s needs, you might get left behind by the competition.

Secure Transactions

Card transactions are as secure as can be. In the event of a chargeback, the acquiring bank, card network, and issuing bank involved will hold a multiple-round investigation to assess the validity of the transaction.

Improved Customer Experience

The key to providing your customers a great shopping experience—apart from selling high-quality goods—is to make purchasing from your store as easy as possible. Always make your products accessible.

Step-by-Step Guide on How Your Business Can Start Processing Card Payments

Step 1: Open Merchant Account

So the first thing you need to do is open a merchant account. Your payment processor cannot credit the money directly to your bank. Once the transaction is processed and the funds are cleared, they’ll be sent at a set date to your authorized merchant account. Many people choose to use integrated merchant services, as if your merchant services are truly integrated, they should work fluidly with every digital aspect of your business or account.

Some of the best merchant account service providers include:

Host Merchant Services (HMS)

HMS is the ideal option for e-commerce stores based in the U.S. They cover a wide range of industries and provide competitively priced cross-border and conversion fees. The application process is also fairly easy.

Helcim

Small businesses who want a clear, transparent pricing model for accurate budgeting should check out Helcim. What sets them apart is their month-to-month pricing plan. Basically, this allows clients to shift from one type of pricing model to another every month. This is beneficial for growing businesses with changing needs.

Square

Square is a very reliable merchant account services provider that many reviewers can vouch for. It has clear, transparent pricing plans, excellent software features, and functional POS machines. Perhaps the only issue here is the application process is quite difficult.

PayPal

Small businesses that are looking for a merchant account to process their low-volume orders regularly can try PayPal. It’s simple, efficient, and straightforward. As long as you adhere to the guidelines, you can already have a business account running in just a few minutes. Perhaps the only problem here is that PayPal is notorious for its high fees on high-volume bulks of orders.

Step 2: Get a POS System

If you run a brick-and-mortar store, the next thing you need to get is a point-of-sale (POS) system. Basically, these are equipment necessary for processing in-person transactions, both swiped and manually keyed-in ones. They’re often placed at the checkout counter.

On choosing a POS system, make sure it has a:

Fast Card Reader

A fast card reader is especially important if your establishment often gets long lines at the checkout counter. The last thing you’d want is a slow-scanning card reader that takes multiple minutes just to process one transaction.

Reliable and Durable Frame

This one’s a no-brainer. If you want your POS system to last, it has to have a tough, heavy-duty software and hardware system capable of processing various volumes of orders on a daily basis for the years to come. Check out user reviews to see the long-term performance of the POS systems you’re eyeing to get.

Functional and Versatile Software

Go for high-quality equipment with versatile software that offers multiple features your business would benefit from. These would include inventory management, invoice printing, and scheduling tools. Ask your provider if the hardware and software can be modified as well. 

Live Customer Support Team

One of the worst things that could happen is for your POS system to break down in the middle of a super busy day. In the worst case, you might have to temporarily halt operations if your POS isn’t working, which is obviously bad for your brand’s reputation. To avoid these types of issues, make sure you have access to a 24/7 live customer support team. 

Step 4: Set Up an Online Payment Gateway

The next thing you’ll need is an online payment gateway. Although, if you run a brick-and-mortar business that’s limited to in-person sales, you can skip this step.

An online payment gateway is a server that allows customers to make payments using their credit cards remotely. This page pops up once your customer is ready to buy and checks out their online shopping cart. Most, if not all, payment gateways can process payments globally. 

Before getting an online payment gateway, we strongly advise business owners to check its:

Security

The number one thing to look for in a payment gateway is security. Make sure you go with an encrypted, SSL-certified site that ensures all card information is 100% safe and secure from any type of hacking. The customer’s safety is always a priority.

Reliability

Look for reviews that discuss the long-term reliability of the payment gateways you’re planning to get. Get more insight as to how long it often takes to process payments.

Speed

Remember, the goal is to make purchasing from your business as easy as possible, and that includes getting a fast payment gateway. Slow-loading web pages and terminals will simply turn the buyer off. If it takes the buyer multiple tries just to get the text to even load properly, they might abandon your cart entirely.

Fees

Always check the fees, especially the cross-border and conversion charges. Trust us, these fees will eat up your profits if you process offshore transactions on a daily basis.

Bonus: Why get an online payment gateway if you already have a virtual terminal? An online payment gateway has significantly lower fees than virtual terminals where the merchant may have to follow rates for manually keyed-in transactions. Plus, payment gateways can accommodate global payments.

Step 4: Check Mobile Payment Processors

If you’re planning to expand your business’ mode of payments and have the extra funds, we encourage you to check out mobile payment processors. They have a large, growing market. In fact, surveys show that more than half of American adults have used mobile payments in the past year.

Additional Resources

How many businesses process card payments

The number of businesses that accept card and mobile payments has steadily been increasing over the past years. This survey goes into detail as to what percentage processes card payments in person, overpayment gateways, and through virtual terminals. 

Americans that prefer card over cash

Credit card payments have always been popular in America. However, the number of cardholders that prefer to use cards over cash for daily transactions has spiked exponentially over the past five years—the highest in decades.

Final Thoughts

Equipping your business with a payment processing system is an excellent strategy that may help you boost orders, improve customer experience, and speed up checkout times. You’ll also be able to sell high-ticket products more easily.

Plus, qualifying for a payment processing system is not as difficult as most make it out to be. You just need to know your options. Remember, if commercial processors are not willing to provide your business with an account, turn to commercial processors. Just make sure you select a legitimate brand to work with.

And don’t rush your decision! There are literally dozens of payment processors on the market. Going through them will definitely take some time. Remember, these types of accounts are long-term commitments, so you need to find a brand that absolutely matches your needs and demands. Don’t simply base your decisions on what’s trendy or popular.

Do you feel like more modern businesses should start accepting card payments? Share your thoughts with us in the comments section below!