Running your business is a lot of work. In addition to creating and marketing your product or service, there are tasks associated with accepting payments from your customers. Customers are increasingly sophisticated in their payment methods, using cash, checks, credit cards, and mobile payments. Credit cards are one of the most popular payment types, and every business should accept them. Here are some tips for choosing the best credit card processing company for your business.
What Is Credit Card Processing?
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Credit card processing is the behind-the-scenes process that’s triggered when a customer chooses to pay with a credit card. Credit card processing includes authorizing a transaction, clearing the funds, and settling the payment.
Authorizing the transaction is how the credit card issuer approves the use of the credit card for the purchase and signals to the merchant that the card is a valid form of payment. Clearing the funds is the act of transferring money from the card issuer to the credit card processor, and settling the payment is when the merchant receives their funds and the customer gets billed by their credit card issuer.
Credit card processing companies take care of all the back-end work of accepting credit cards. For this service, they charge a fee (usually per transaction) to the merchant. Choosing the right credit card processor is essential to the smooth processing of credit cards for your customers. Here are key factors to consider when choosing a credit card processing company.
Point of Service Options
“Point of service” is when your customer interacts with a credit card processing device. Is that device wireless or at a cash register, can it accept mobile payments such as Apple Pay, and is it easy to use? These questions should be considered when choosing a point of service device, and each credit card processing company differs in what point of service devices they can work with.
Spend some time to think about how you’d like your customer to interact with a point of service device. This will differ for every business. For example, a brick and mortar store will have different needs than a food truck or restaurant. Make sure the credit card processing company can accommodate your needs.
Cost and Fees
For your bottom line, it is critical to understand the cost and fees of using a credit card processing company. Most companies charge an interchange fee, which is a set fee (typically 2 to 3 percent) on every transaction processed. In addition to an interchange fee, companies may charge for monthly statements, setup fees, and the rental of any point of service devices. Be sure to know all the fees so you can budget appropriately.
Can your chosen credit card processing company handle both debit and credit cards? What about mobile payments, electronic benefit transfer (EBT), and gift cards? Make sure that every payment type you plan to accept can be handled by the credit card processing company. After all, what’s worse than turning away customers?
Paying with credit cards is a preferred option for many customers. With these tips, your business can pick the credit card processing company that meets both you and your customer’s needs.