In order for any business to succeed in today’s marketplace, it is critical to accept credit card payments. From a farmer’s market stand to a high-end restaurant, customers expect payment options that are quick, convenient, and secure.
While it may seem overwhelming, there are many benefits that come along with accepting credit card payments:
Now that you understand how valuable it can be to accept credit cards, let’s take a look at what you need to get started.
In order to accept credit card payments, you will need to apply for a merchant account, but there are some things you’ll need to consider before completing the application, including:
Read on to learn more.
Depending on what type of business you operate, you’ll need to consider how you want to accept credit card payments. This may only be one way, or it could be a combination of channels based on your business’s needs.
It’s customary for most people to have a credit card branded with either a Visa or Mastercard logo. Typically, when you sign up for a merchant account, you’re automatically set up to accept Visa, Mastercard, and Discover transactions. But, have you considered if you’ll want to accept American Express (Amex)?
Within the last several years, the American Express OptBlue program has made it easier for small businesses to accept Amex transactions. Here’s just some of what you can expect if you sign up for OptBlue:
Nothing in this world is free, including credit card processing services. Having a good understanding of the fees associated with accepting credit cards will give you a leg up in your research and ensure you’re making the most money on each transaction.
Here are some fees you can expect to pay:
Before you can begin accepting credit cards, you’ll need to set up a merchant account. This account allows your customers’ credit card payments to be transferred from the card-issuing bank to your business bank account. To do this, you’ll need to work with a merchant services provider. As there are many providers out there, be sure to do your due-diligence to select the right credit card payments partner.
Here are some questions to ask as you research:
Once you’ve selected a merchant account provider, you will begin the application process. Since the merchant account provider is taking on risk to enable your company to accept credit cards, this will require a thorough review and underwriting process before you are approved for a merchant account.
Although application processes differ from one provider to another, be expected to submit the following:
Merchant account providers want you to be able to start accepting credit cards as soon as possible. Once you have submitted all of the requested documentation, your merchant account may be approved on average within 3-4 business days.
Once your merchant account is established, you can work with your provider to choose equipment that meets your specific needs. For in-store payments, you have these options:
If you select an all-in-one merchant account provider, this means the company provides the merchant account, payment gateway, and hardware “all in one.” If you plan on conducting business online, a payment gateway is necessary in lieu of a terminal, which is used when the credit card is present at the time of sale.
A gateway transfers the data between the payment processor and the point of entry – like the checkout form on your website or mobile app – to continue the payment lifecycle. It is the virtual equivalent of a physical POS terminal. Payment gateways encrypt private data, such as credit card numbers, to ensure the information passes securely between the customer and the merchant.
If you plan to sell goods, collect payment for services, or take donations online, you’ll need to consider how you want to capture customers’ credit card data. Some options for online payments include:
Once you submit a merchant account application and are approved, your merchant services provider will help you activate your payment gateway (if doing business online), set up any equipment you may need (if accepting in-person payments), and run successful test transactions. When those steps are complete, you’re ready to start accepting credit cards and other forms of electronic payment (e.g. debit cards and gift cards).
It is important to note that once you begin accepting credit cards, you will need to comply with Payment Card Industry Data Security Standards (PCI DSS). This is a set of guidelines that was created by the card brands to help keep consumers, businesses, and banks safe from fraud and abuse.
To become PCI compliant, you will need to complete a Self-Assessment Questionnaire (SAQ) each year. The provider you choose should offer merchant account solutions that are compliant and help reduce PCI scope. Merchant account providers are partnered with third-party vendors who are certified to help their merchants complete the required annual SAQ to identify vulnerabilities and verify merchants are compliant. This usually takes place within the first 30 days of opening a merchant account.
Your SAQ will depend on a couple of factors:
Neglecting to become compliant may result in:
If you’d like to learn more about getting started with credit card processing, our payment professionals are ready to assist you. Click here to schedule a free appointment.
Disclaimer: The information provided above is for educational purposes only and does not constitute business, legal, or financial advice.