The days of cash and checks as the main method for payment of goods and services are long gone. In today's economy, more sales involve plastic than cash or checks. Whether the customer is making his or her purchase with a credit card or debit card, you need a system that can handle these transactions. Today, you have several choices available, and you should research each option to see which method fits best with your selling structure.
Offline Credit Card Processing MethodsFull Service Processing Machine
Most brick-and-mortar stores use this type of equipment. You purchase a terminal, set up an account with a merchant service provider and you're ready to a take debit and credit card payment. Your terminal is linked to a phone line to make transactions. You can have either a dedicated phone line, or your terminal can share one line. However, you cannot use this line while a transaction is in progress.
When processing a transaction with a stand-alone machine, you simply swipe the card and follow the on-screen instructions. You can also manually key in the numbers if the customer is placing a phone order and you don't have the card. You will need additional information to complete the transaction. Your provider may request the security code on the back of the card or the address of the customer.
Computer Processing
Some credit card payment services that you normally associate with online shopping are now available for use in telephone or face-to-face transactions. You can simply go online to your provider, log in and complete the transaction through your merchant account. You provide the customer's account number, security code and expiration date, and the secure server completes the transaction. One attractive feature of this method for the occasional or low-volume seller is that it's a pay-as-you-use-it service. You only pay for transactions and don't have a monthly service fee.
Cell Phone
The latest entry in credit card acceptance is through the use of a smart phone or tablet. Apps designed to be used with a scanning device download onto your device easily, and the scanner mounts right onto your phone. You set up your account with the service provider, and you're ready to accept payments anywhere. This is really great for those whose work is in the field, at a trade show or at a customer's location.
Simply swipe the customer's card through the scanning device, and the information is relayed to your service provider. You input the amount of the transaction and follow other directions on the screen. The transaction is completed electronically, and the funds are transferred to your account in the time frame set by your provider.
Your Merchant Service ProviderAll of these methods entail setting up an account with a service provider or third-party credit card processor. When you contract with a processing company, you set up a bank account to which your money will be deposited. All fees associated with your transactions will be debited from this account as well. This may be an existing checking or savings account, or you may elect to open an account specifically for this purpose.
When choosing your credit card processing services, research is very important. There are three types of costs involved with credit card transactions. These costs can fluctuate, so here's where your research can make a big impact on your bottom line. There may be an initial setup fee. This is a one-time cost to process your information and set up your account. It can be free or cost as much as $79 or more. The provider will charge you a percentage of each transaction. This fee is for purchases as well as returns. The percentage is set on a sliding scale, and the amount varies depending on things such as your sales volume. There is also a transaction fee every time you use the system. You will also have a monthly service fee. This will vary from company to company and may differ depending on the total number or dollar amount of your transactions.
The services and costs associated with processing credit and debit cards varies greatly between providers, so it's important to research which services will benefit your company and which provider gives you the best price. Do your research before making any commitment, and be aware of new services or changes that can benefit your business or can be detrimental to your bottom line.
