Figuring out how to accept credit cards should not be a very complex process. It is as simple as finding the least expensive route between your bank account and the customer’s credit card.
This is just a two-step process.
– Figure out how you want to do business with your customer: using a traditional credit card swiper/ mobile device, POS system, or remotely through the phone or internet.
– Once you figure this out, you should determine whether to use a merchant account or accept credit card payments directly to your bank account.
If you are not sure which method suits you best, you should find out how both of them work. Here are the basic methods for accepting cards:
POS refers to a complete checkout terminal that includes NFC reader, barcode scanner, credit card swiper, cash register, among other equipment. To use this system, you need to have a merchant account. It is best for businesses that have a physical store but want to connect several cash registers together.
An app or dongle permits you to accept credit cards anywhere through a phone or tablet. It needs a credit card reader that affixes to your phone and you do not need a merchant account. A mobile credit card processor is ideal for businesses that sell in multiple locations.
In this method, a piece of hardware is used to swipe credit cards in person. If you have an online business, the credit card number needs to be entered manually. You need a merchant account to accept credit cards in this manner. A credit card terminal is ideal for businesses that only need to accept credit cards.
This is an ecommerce solution, 3rd party marketplace, or shopping cart software that allows online businesses to accept payments at their online stores. If your ecommerce website is hosted by a 3rd party, you might not need a merchant account. On the other hand, stand-alone sites might need a merchant account.
Now that you understand the basics of credit card payments, you should be ready to make huge decisions. Do you need a merchant account service or not?
A merchant account service acts as an intermediary between the customer’s credit card company and your business. They process your payments and ensure that the money is withdrawn from a credit card account then placed into your merchant account. When the money passes all the processing protocols, you can transfer it from your merchant account to your regular bank account.
Merchant accounts are an option for all kinds of businesses, including online and mobile businesses. However, some methods of accepting credit cards do not require merchant services.
Before opening a merchant account, you should ensure it is the kind you need. Different merchant accounts include:
Regular merchant accounts – the service provider might offer merchant bank accounts that allow credit and debit card payments. This account acts as a holding place for all the payments you receive. Once the finances have been approved, the merchant transfers the money to your bank account minus commission.
Internet merchant account – this account is for online businesses.
Mail or telephone order (MOTO) – this account is ideal for a business that operates by taking payments through direct mail or telephone.
Retail merchant account – this option is mostly for businesses that have a storefront location. The customer comes in and swipes his or her debit/credit card through the payment terminal. If you are wondering where to find the best credit card reader for a small business, check online.