Credit cards are prevalent among people with bank accounts in different banks across the US. The cards have also gained a lot of popularity among all the nations of the world. Businesses have invested in the relevant technologies that aid in credit card payment. The best way to accept credit cards for small businesses is by opening a merchant account and purchasing a card reader.
A card reader is an electronic device that helps to read credit cards as well as debit cards. The machines can also read other cards such as prepaid cards, gift cards, and electronic driver’s license, among others. The cards can send and receive information remotely from servers of the relevant service provider. A transaction involving credit card may take less than five minutes to complete.
The leading companies that provide credit card payment services include Visa, MasterCard, American Express, and Discover. Applicable fees may vary depending on the service provider and the card reader operator. Sometimes you may pay goods online by providing your card number and PIN instead of swiping at a point. You must know how to transfer money using routing number and account number to make payments.
How do I Start Accepting Credit Card Payments?
For your information, accepting credit card payment will increase your sales with time. Moreover, it will improve your customers’ shopping experience as well as increasing cash flow. It will also provide security for your money since you will not have to receive real cash.
Before accepting credit card payments, there are a few things you have to do. First, you can start by opening a merchant account with the relevant bank where your payments will be going. You must also see whether your bank abides by the applicable rules by the cards operator association.
But what is a merchant account? It is merely a type of a bank account that allows businesses to accept credit and debit card payments as well as other payment cards such as prepaid cards and gift cards. The best account for a small business is the one that allows credit card processing for small businesses no monthly fee. If it has to charge, then it should be minimal to help the company to make realistic profits.
One thing you need to know is that there are applicable fees required before setting up a merchant account. Most small businesses might find it difficult to start such accounts due to financial constraints. However, such businesses can still accept credit card payments without a merchant account by seeking third party services.
How can you Accept Credit Card Payments without a Merchant Account?
As I mentioned earlier, it can be hectic and costly to obtain the license to operate a merchant account. There is a lot of paperwork and quality check involved to get the account of which it might take several days before you obtain a functional account.
However, some third-party agents act as intermediaries for small businesses and help in accepting credit card payments for small businesses. They receive all funds paid by customers using credit cards and then deposit them into the respective customer company’s accounts. Sometimes the third party agents also handle cash on delivery payments.
Most intermediary companies that collect payments on behalf of small businesses do that mainly for online stores or websites. As a small business owner, you have to pay a certain amount of fee to the third party agent to help you with the online payment collection.
What are the Factors to Consider before Acquiring an Intermediary for My Small Business?
There are several factors to consider before acquiring the services of a third-party agent. They include the following.
a) Hardware fees
How much does the hardware materials such as card readers and point of sale cost? Choose a company that does not require expensive machines. Some intermediary companies can give you the relevant hardware machines and software to help you run your business effectively.
How secure is the service? Issues with money require adequate security measures to avoid loses. For instance, the aggregator should assure you of things such as essential certificates, Instant authorization of customer transactions, and encryption of all financial data on the Internet.
c) Customer care
Your third party agent should assure you that they will provide you with 24/7 customer support when issues about payments arise. The customer care channel must be convenient, preferably a telephone service or a live chat. Failure to have a proper channel of communication can make your small business lose a lot of money.
d) Flexibility on payments
Avoid intermediaries with hidden fees. Some of them are there to drain the little money you have. You should make sure you exploit all the information concerning charges. Moreover, the intermediary should accept all kinds of payment cards. Inquire whether the company provides financial statements. Statements enable you to understand the performance of your business over time.
e) Payment limitations
Some aggregators will want to limit the amount of payment you can receive per day or month from your customers. Such restrictions can be very devastating to your company as customers willing to buy your goods can be locked out if you reach the limit. See the loss you get on the limitations put.
Which are the 9 Ways to Accept Credit Card Payments?
There are many ways you can accept credit card payments. Some are limited to particular countries, while others operate internationally. Most of these ways accept online payments. Well-known companies that accept credit card payments online include PayPal, Payoneer, Skrill, and Western Union, among others.
Let us look at the best nine one by one in detail.
PayPal is the most popular payment platform in the world. Based in the United States, PayPal serves millions of people around the globe. Anyone with an identity card can open an account with PayPal. Many countries of the world accept the operations of PayPal. The process is just easy and straightforward and happens online.
Setting up a PayPal business account is very first. The account is secure and free. Moreover, your customers do not need a PayPal account to pay you. There are no hidden fees whatsoever.
First, you have to visit PayPal online using either a smartphone or a personal computer using paypal.com. Find a tab about the PayPal business account and provide your email address. Next, PayPal sends a confirmation link to your account. Click the link and provide a business name for your account and link your account to your bank. You are ready to start receiving payments.
Do you want to use Payoneer to receive your payments? It is simple to set up a Payoneer business account. Visit payoneer.com using your smartphone or computer. Set up an account to receive payments from your customers who buy your commodities online.
The good thing with Payoneer is that it accepts payments from an unlimited number of companies. Payments are instant and reflect within hours in your account. Moreover, there are fewer charges involved. Above all, opening a Payoneer account is free. You need your email account, of which you have to confirm before entering other details such as official names and addresses.
Upon opening a Payoneer account, you should link it to your local bank. When you receive funds in your account, you just withdraw the money in your local currency at a fee. The good thing with Payoneer, just like PayPal, is that there are no hidden charges.
Square is becoming a popular payment platform for business operators, more so in the United States of America. The company has portable card readers that efficiently work with smartphones using a unique app that you can download from the relevant websites.
Square credit card payment process is always under encryption to prevent financial data leakages to the fraudsters. Payment is very convenient. Within the app, you can give your customer a discount or receive a tip from the buyers.
With the square, you can integrate your business online so that when someone clicks buy, he or she gets directions to square. The integration helps you to receive funds in your account when the card owner enters his or her PIN.
Using a Square card reader to accept credit card payments enables you to print receipts using a wireless printer for your customers. The receipts are more detailed as well.
4. Google Pay
Google Pay utilizes smartphones and tablets to enable you to carry out the payment process. The payment system is getting popular day by day. It helps those people with a tendency to forget passwords since the platform allows you to authorize payments across all signed-in devices. Password recovery is easy as well.
Interestingly, google Pay can work with both android and iOS. It thus offers a significant and flexible option to make and receive payments irrespective of the phone you use. Within Google Pay, you can give your customers discounts as well as sharing loyalty gift cards. It reduces the need for tickets.
To get the application, you can go to the Google Play store and search for Google Play. You can also click here to download. For iOS, you can get the app in the App Store. By clicking here, you can access the app very quickly.
Skrill is also very popular when it comes to making international payments. It operates in more than 30 countries in the world. Again, opening an account with Skrill is easy as you need your email address and an operational bank account. Skrill accounts are free to open.
Once you open an account with Skrill, you get a wallet, which is simply your account. You must link the account with your bank account to receive funds upon withdrawing. Every transaction at Skrill attracts 1.45%. You will not incur a lot of costs that make you get small profits.
Interestingly, the account works with both Android and IOS. That is how flexible the system is to the users. With such information with you, the ball is in your court already. It depends on your preference. As an online checking account, Skrill has led to the growth of many small companies in the world.
Stripe began its operations in 2009 as a result of Irish entrepreneurs John and Patrick Collison’s efforts. It has its headquarters in San Francisco, in the United States of America. It has been offering business solutions to many entrepreneurs in the world. It acts as an intermediary for several businesses across the globe. Its operations purely depend on the Internet.
Stripe usually provide APIs that website developers use to integrate into payment processes in various websites as well as mobile applications. The Atlas platform allows startups in the U.S to incorporate their businesses more efficiently. It makes their business transactions faster.
Payments on services are elaborate with Stripe. You can pay as you go for just 2.9% and .30 cents per successful card charge, plus 1% on international cards; 0.8% and a $5 cap on the ACH debits. All custom pricing is available upon request. For more details, visit stripe.com
7. Amazon Pay
Amazon Pay is among the popular payment methods for small businesses. Merchants, shoppers, charities, among others, can utilize amazon Pay to receive and make payments. Amazon’s pay is easy to use. If you already have an Amazon account, you can easily access your wallet for payments. Detailed transaction history is easy to obtain at any time.
Moreover, Amazon Pay is secure as it has fraud protection mechanisms installed. Furthermore, you, as an account holder, receive free fraud protection mechanism to ensure that your funds remain secure all the time.
Amazon Pay can work with your mobile phone browsers so that you can make payments on the go. Charges are 2.9% plus thirty cents for each domestic U.S transaction, 3.9% for the international processing fee, and $20 for all the disputed charges. Although Amazon Pay appears a bit expensive, it offers a secure platform that will never leave you in trouble.
Venmo is not only essential for business transactions but also essential if you want to send your friend some money. Apart from receiving payments, you can also use Venmo to make payments for goods and services. Venmo works well both on the website and app.
For you to use Venmo as a business payment platform, you need to integrate it with PayPal or Braintree. Any of the two can work. It means that your funds go directly to either PayPal or Braintree. However, statistics place PayPal as the best option to make the integration.
If you want to know more about Venmo, you can click here. The good thing with Venmo is that it is convenient to use and works with various smartphones as well as android and iOS smartphones. However, it requires you to be extra careful not to leak important information about your account to fraudsters online.
For your information, Braintree is a PayPal service that aids in online payments. Some big companies, such as Uber, Dropbox, Yelp, and GitHub, among others rely on Braintree for payments. It very convenient when it comes to receiving payments from customers online.
The security concerning transactions across Braintree is on a high level, presumably because it is a PayPal subsidiary. Initially, I mentioned to you about the high-security measures that PayPal uses to protect you from fraud. Those are the same measures they apply to Braintree.
Braintree operates in more than 45 countries in the whole world. It supports over 130 currencies used across many parts of the globe. It may work with your local currency without any issue.
The standard pricing is 2.9% and .30 cents per transaction. You can get custom pricing as it is available upon request. There are no hidden fees, according to my research.
Accepting credit card payments is opening gateways for your business success. Even when you are not able to get a merchant account due to high fees and a lot of paperwork required, you can look for third party agents such as PayPal, Skrill or Payoneer to help you collect payments at a small cost. After all, opening an account with third party agents is free so long as you have a bank account.