A credit card is a kind of payment card that allows you to purchase goods and services on credit. It is plastic in nature and banks, credit unions or any other financial institutions issue such cards to the eligible customers. Today many business people have learned how to accept payment from a credit card instead of cash. Accepting credit card payment is beneficial since the customers pay just what they spend giving sellers an easy time.
As a business person, you must acquire adequate knowledge before starting to accept card payments. Understand all challenges associated with card payments and know how to deal with them in case they arise. As a merchant, you should be responsible and should ensure that you keep a customer’s data secure. Disclosing data belonging to your buyers’ cards can expose them to fraudsters. Furthermore, you should be honest enough not to misuse card owners’ data fraudulently.
Most merchants are familiar with card swiping to accept card payments. One thing you should note is that you can also accept card payments online. All the payments, both online and physical ones, reflect in one account. Again, it is not a must to have a merchant account to accept card payments. You can accept credit cards online without a merchant account by relying on third-party agents to collect payments for you.
How do you start accepting credit card payments?
Before you start accepting credit card payments, you have to research to know which method suits you. Follow the following steps below to set up a card payments business.
Decide how you will allow card payments
Before starting to accept card payments, you should plan which way to accept credit card payments. There are around three ways to accept card payments. These include; online credit card payments, Mobile credit card payments, and in-person credit card payments.
Online card payments are suitable for merchants who sell their goods and services remotely via phone and email. For people who own physical stores, then accepting in-person card payments can be convenient. Business people offering products and services in the field such as landscapers, vet officers, and expansionists, among others, can accept mobile card payments.
Choose the merchant service provider
After choosing the way to accept card payments, you should choose the most convenient merchant service provider. A merchant service provider gives you hardware and services associated with card payment processing. The hardware might be free, but you have to pay for the services.
A good merchant service provider should have elaborate fraud protection measures to secure your card data. Check whether they offer other solutions such as payroll solutions. Also, check how the service provider charges for the services as well as the customer service.
Open a merchant account
Now that you got the right merchant service provider, you need to open an account. You can begin through a bank or a reputable MSP. MSP is the easiest way to accept card payments more so for small businesses.
You should also get an account where your service provider will channel your payments. It is possible to get a free online checking account with no opening deposit from various banks.
How do you accept online card payment?
Online payments are becoming very common among the elites, where people log into online stores and purchase items online. For you to enable online card payments, you should sign up with an online payment gateway such as Payoneer, PayPal, or stripe, among others.
You have to include either of the gateways during checkout. Everything, including transaction charges, happens online. The work of PayPal or any other is to collect payments for you, take their charges, and send them to your account that belongs to you.
Some sellers can allow you to transfer money using a routing number and account number to their account before sending you your item via parcel method. However, as a customer, you must be familiar to the seller as such payment is not secure.
How do you accept mobile credit card payments?
For you to accept mobile card payments, you should have a smartphone and a card reader such as Square which plugs into the phone’s earphone plug or in the USB port. You should walk around with it so that you can accept payments anywhere when necessary.
Mobile card processing requires an internet connection. Each time you read a card, your card processor deducts the agreed amount and deposits into your account.
How do you accept in-person credit card payments?
The process requires the customer to visit your store physically to buy goods or services. Before starting to accept in-person card payments, you should purchase a Point of Sale (POS) machine and a card reader. Some merchant service providers can give you free hardware to carry out the business.
When customers select goods, you calculate the total amount and allow the customer to swipe or insert their card into the machine. Payments can be accepted or declined immediately. Accepted payments move to your merchant account and later into your business bank account within a few business days.
How can you get a credit card to use for purchasing goods and services?
Several financial institutions, such as banks and credit unions, give credit cards to eligible customers. Not everyone qualifies for a credit card. Most financial institutions check your credit scores before giving you a credit card. Fair to excellent credit score holders quickly get credit cards while the poor credit score owners find it challenging to acquire one.
However, some companies give instant credit card approval for bad credit with no deposit to poor credit owners to enable one to raise his or her credit scores. When you get a credit card, you spend within a given limit of which you pay the debt to the card issuer later.
The better you use the card, the higher your limit. People with good credit scores get higher limits while poor credit scores get lower limits. Another category of people who find it difficult to access credit card services is the ones who have closed negative accounts.
This way, it becomes difficult to open a checking account with any bank. However, that should not be an hindrance to your financial prosperity. There are financial institutions that give second chance checking accounts with no opening deposit so that you can pay bills and do shopping.
Why should a business accept card payments?
There are various benefits of accepting credit card payment. They include the following.
1) Credit card payment boosts sales
Research shows that customers using credit cards purchase more goods than those using cash hence ending up spending more. Furthermore, credit card payment is convenient as you can buy products even without money in your hands.
2) Increases cash flow as compared to check payment
Credit card payments reflect in your account within a few days as compared to the check payment method, which takes many days for the money to appear in your account.
3) It helps to improve the client’s experience
Once you offer your client an opportunity to pay for goods and services using credit cards, they tend to come back again since it is less hectic to buy products and services using credit cards. Furthermore, many people do not like carrying large sums of money.
4) It saves your time
Once you accept card payments, you just wait for the money to reflect into your account as compared to when you receive payments by check as you have to travel to your bank branch to deposit the checks which spend your time.
5) Increases security
Many times thieves wait for businesses to sell during the day and then come in the evening to steal the money. Using credit cards helps to avoid thefts since the money is already in your account.
Can you accept card payments if you have bad credit?
As long as you have a business account, you can receive payments from clients. The credit score mostly matters on the customer’s side and not yours. As a business person, you are receiving money and thus no need to have good credit.
However, if you want to take a credit card for a business, you should have a good score. Despite that, some Institutions give small business credit cards for bad credit to enable you to run your business comfortably when at the same time helping you to increase your score.
How do merchant service providers benefit from card payments?
Merchant services providers do not offer free services. They charge various fees to enable them to benefit in the process. There are two types of fees for card payments which include transaction fees and the processing fees.
First of all, merchant service providers charge transaction fees if the transaction goes through. A processing fee is a percentage charged for every payment depending on the venture’s average transaction amount.
Accepting credit card payment for businesses is a sure way of growing your business tremendously. Furthermore, it is safer to receive payments via cards than receiving cash as it can be bulky when in large sums and also can attract thieves.
Card payments ensure that your money goes directly into your account. For excellent results, you should choose the best payment method for your business. Above all, as the customer uses the credit card, he or she builds his or her credit cards.