How to Accept Credit Card Payments for Business? [Complete Guide]

As a business owner, you’re always driven to find ways to grow your business. But there’s a small thing that’s often overlooked, especially when starting — not adding credit card payment to your arsenal. 

You will lose potential customers if you do not accept credit card payments. That is true because, in this digital age, many consumers prefer credit cards over other forms of payment, mostly because credit cards help in building credit score. 

So, you must incorporate credit cards as a purchase medium. We have explained how to accept credit card payments for businesses, the fees involved, and payment-accepting methods in this blog. Read till the end and take notes. 

How to Accept Credit Card Payments?

These are the actions you must take if you’re ready to include credit card payments as a new means of payment for your company.

Step 1: Select the Credit Card Payment Method

The first step is to decide how and when to accept credit card payments. You can take credit card payments in three different ways: via the phone, in person, or online. Your decision will be determined by the type of business you run.

Step 2: Choose a Credit Card Processing Network

Accepting a customer’s credit card payment involves more than merely inserting or tapping the card. The customer’s card and account information must be electronically verified and processed before you can be authorized to accept the payment. All of this happens digitally behind the displays in a couple of seconds, but payment processors are necessary for it to work.

You have two alternatives if you want to take credit card payments: merchant accounts and payment service providers. To accept payments with credit cards, you can open a merchant account with a bank.

Using service providers can be your second option. Payment service providers are companies that let you collect payments using credit cards without requiring you to have a merchant account.

Step 3: Configure the Payment Terminal and Software

After you’ve set up a system for processing credit card payments, you may need to buy gear or upgrade. Your point-of-sale terminal device and software must be in excellent condition to support credit card payments.

For physical businesses, you have to order and configure gear like a point-of-sale system and credit card reader.

E-commerce platforms like Shopify come with payment channels integrated in. If you are the website owner, you might need technical help from your website developer or credit card processing provider to add credit card processing for small businesses to your website.

So these are the simple steps to learn how to accept credit card payments for small businesses. Now that you’re aware of this, let’s go ahead and discuss the types of payment options you have as a business owner. 

Suggested Read: Credit Card Standard Size, Weight, Material, and Dimensions

Ways to Accept Credit Card Payments for Small Businesses

Small businesses can accept credit cards online, over the phone, or in person. These are the three basic methods, let’s talk about each of them in detail.

Service providers and brick-and-mortar retailers can both profit from in-person credit card processing. All of these transactions require the customer to show their card.

As the cardholder and card are present, there is less chance of fraud, hence costs for in-person transactions are usually cheaper than for other kinds of transactions.

Note that a POS system and a card reader are required for in-person credit card payment processing.

Online retailers and companies providing digital services are among the businesses that depend on online credit card processing. Digital transactions frequently incur greater processing fees than in-person transactions.

To accept credit card payments online, you need both a payment gateway and a digital storefront, like a website or e-commerce store.

Takeaway orders are commonly paid by card over the phone, a practice that is widely used by restaurants. During this process, the retailer receives the credit card number from the customer and manually puts it into their card reader.

Processing costs are often the highest for these transactions because of the increased risk of fraud. If you want to accept credit card payments over the phone, you’ll need a POS, online payment gateway, or credit card reader.

Moving ahead, let’s discuss the charges and processing fees that are involved in taking credit card payments in the next section. 

Processing Fees to Take Credit Card Payments

Please take note of this if you were unaware that companies pay the providers for collecting credit card payments. They charge a fee to conduct fraud investigations, confirm customer information, and accept and deposit funds across accounts.

The majority of providers charge per transaction, and the specific business you choose to work with will determine the fees. Therefore, to manage a profitable business, you must calculate e-commerce payment processing fees.

Here’s the rundown of average charges of some of the biggest service providers in the market: 

Credit Network	Average Charges
American Express	2.5%— 3.5%
Discover	1.56%— 2.3%
MasterCard	1.55%— 2.6%
Visa	1.43%—2.4%

In the beginning, these networks may be too costly for you. You can go for them if you have the funds. If not, please see the other options in the following section. 

Alternative Services to Accept Credit Card Payments 

Since every organization has individual needs, finding and selecting the finest credit card network provider might be challenging.

Below is a list of the 5 effective and reasonably priced network providers. It will assist you in selecting the ideal one as you read through.

Managing your finances is made possible with the help of PayPal. Practically every kind of business uses PayPal to receive money. Whether you process credit cards online or in person, it offers excellent merchant solutions and a wide range of options. 

Processing Fees: 

• In-person transactions: 2.99 percent + $0.49 
• Online transactions: 2.9 percent + $0.49 

Shopify is an online store setup and sales platform for enterprises. With Shopify, any business can immediately accept credit cards, thanks to its built-in credit card network infrastructure.

Processing Fees:

• In-person transactions: up to 2.7 percent 
• Online transactions: up to 2.9 percent + $0.30 
• Card-not-present transactions: up to 2.9 percent + $0.30

Venmo is a secure online money transfer service that provides companies with payment processing options. Consumers can transfer the money and use credit cards on the Venmo checkout page of the business.

Processing Fees: Online transactions: 3.49 percent + $0.49

Square enjoys a strong reputation in the industry. The best thing is that there are no long-term contracts or setup or transaction fees. You just need to select the paid or free program for your POS system based on your preferences.

Processing Fees:

• In-person transactions: 2.6 percent + $0.10 
• Online transactions: 2.9 percent + $0.30 
• Card-not-present transactions: 3.5 percent + $0.15 

Stripe was specially built to help out small-scale businesses. They offer programmable tools for both online and offline payments. It also includes features to make invoicing and billing easier.

Processing Fee: 

• In-person transactions: 2.7 percent + $0.05
• Online transactions: 2.9 percent + $0.30

So, these are the credit network providers that are reputable and reliable. You must contact their service department to get a brief of features and pricing before deciding which option fits your pocket. 

Benefits of Accepting Credit Card Payments as a Business

Integrating credit card payments into your system has numerous advantages. Although this is easy to overlook when first starting, it can provide a boost from day one and yield big results later on.

Let’s discuss why small businesses should accept credit cards:

Improved Cash Flow

These transactions are performed electronically and settled in a matter of seconds. Your bank statement will show the money that is automatically placed into your account. This facilitates smooth financial flow. 

Not just that, credit card payments can also help to efficiently track daily accounting and finances. Also, any billing difficulties will be resolved by the network providers.

To Keep Up with the Market

Suppose a consumer visits you in person or online, chooses what they want to buy, and then walks out of the checkout because you don’t accept credit cards. He’ll go to other businesses that accept credit cards. Terrible, isn’t that right?

You have to accept credit card payments and keep up with market demands to compete fairly.

Increase in Sales

A cash-only outlet reduces the number of clients you can serve. You can cater to a wide range of clients when you accept different payment options. Your company’s sales profile will increase as a result of this adjustment.

Establish Your Company’s Legitimacy

Consumers are more likely to trust a company that accepts credit card payments since it shows that it is a legitimate company with a bank account. Additionally, it will foster a sense of familiarity and encourage repeat business.

So, these are a few reasons why you should integrate credit card payments into your system. 

This explains everything about how to accept credit card payments. We hope the information written on this blog will be helpful for your business. Just make sure to read the fine print and terms and conditions carefully before getting involved with credit card service providers. 

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Frequently Asked Questions 

 

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