By Erica Houskeeper on April 24, 2020
If your business doesn’t accept credit cards, now may be the time to start. Accepting credit card payments can increase in-store sales by up to 40 percent compared to cash payments alone, and credit cards are a necessity for selling anything online.
In the era of COVID-19, when most brick-and-mortar stores are closed and people are buying online or over the phone, a cash-only store will lose out on potential business. Also, a growing number of businesses and consumers have stopped using cash over fears that physical currency, which is handled by tens of thousands of people, could be a vector for spreading the novel coronavirus.
If you want to accept credit cards at your business, your first order of business is finding a solution to accept your customer’s card data. This can be done using either a traditional credit card point-of sale (POS) terminal or a payment gateway for online transactions.
A POS system is a software system that serves as the central hub of your business. POS systems help you manage transactions, track inventory, and provide business analytics. Choosing a POS system first is essential as some systems have built-in payment processing to accept credit card payments.
For online sales, setting up a digital or e-commerce POS platform will allow shoppers to purchase from your site. In either case, you can choose from a one-stop solution that has built-in payment processing or a POS system that will require third-party payment processing.
How to Choose a Merchant Account
There are two different kinds of merchant accounts—a traditional merchant account and an all-in-one merchant account.
If you are a small business, an all-in-one solution that includes POS, payment processing, and merchant services is likely your best bet. An all-in-one solution includes flat rates, all-inclusive customer support, and customer relationship management (CRM) functions. The downside of an all-in-one system is that they are more expensive and offer less flexibility.
Meanwhile, traditional merchant service providers are a good option for higher-volume sellers since their credit card processing fees tend to be lower than all-in-ones. Typically, you’ll see significant savings when your sales reach about $20,000 a month for in-store sales.
The benefits of traditional merchant accounts include faster deposits due to its application and vetting processes, and better pricing for established businesses. The disadvantages of a traditional account include longer setup times and fees, as well as additional fees for online sales.
How to Select a Payment Gateway
A payment gateway is a technology used by businesses to accept debit or credit card purchases. This includes physical card-reading devices found in brick-and-mortar stores and payment processing portals for online stores. It’s worth pointing out that brick-and-mortar payment gateways in recent years have begun accepting phone-based payments using Near Field Communication (NFC) technology.
A payment gateway is essentially the technology that connects merchants of all kinds—online retailers, traditional stores, and e-commerce ventures—and payment networks. As we mentioned above, Stripe, PayPal Payments/Braintree, Amazon Payments, and Authorize.net are all examples of payment gateways.
Things to look for in a payment gateway provider include transaction security, high-quality customer service, options to accept multiple currencies, and an easy-to-understand fee structure.
How to Choose the Right Credit Card Processing Equipment
The credit card equipment you need will depend on whether you are selling in-store or online. If you plan to accept mobile or in-store payments, you will need a card reader. If you are selling online, you don’t need any physical equipment.
For in-store and mobile purchases, credit card payments require card reading equipment that allows you to swipe a card physically. Square, for example, comes with a free magstripe credit card reader that can be used for accepting credit card payments on smartphones and iPads. Businesses can also purchase additional credit card readers to accept tap and chip payments.
Another option is a virtual terminal, which turns your computer into a credit card terminal and allows you to either manually input the card data or read it using a compatible card reader. As merchants and consumers are looking to e-commerce more than ever, a virtual terminal can be a helpful online solution.
Virtual terminals are ideal for online services and card-not-present orders. Merchants can process payments anywhere with an Internet connection, create one-off or recurring payments, and key-in card information and store it for future use.
For e-commerce and virtual terminals, credit card payments use a payment gateway that allows customers or sales staff to enter credit card information into a secure online form. Therefore, no physical hardware purchases are necessary.
Sekure is offering many flexible solutions to merchants affected by Covid-19, including ways to eliminate your credit card processing fees entirely. To learn more, visit our Covid-19 Merchant Resource page.