Everything Small Business Owners Need To Know About Credit Cards

Choosing the best credit cards accepting service for your small business is a big decision.  You can’t make this decision hastily or without adequate information.  If you do a little research before you choose with payment processing company you want to sign up with, you’ll be more certain to get a good value for your money and serve your customers in the way they deserve.

Some Facts About Credit Card Use

There was a time when credit cards were very unusual forms of payment.  Credit cards as we know them now were only introduced in the mid twentieth century.  Very few people carried them on a regular basis or used them for routine purchases.  Many businesses wouldn’t accept credit cards because of the many steps required for credit cards accepting payments.  Within just a few years, the number of credit card users rose significantly; by the 1980s it was common for most American adults to have at least one credit card in their name.

Today, there are estimated to be 609.8 million credit cards held by customers (“The Survey of Consumer Payment Choice,” Federal Reserve Bank of Boston, 2010).  As of 2008, the average credit card holder had 3.5 cards in their name (“The Survey of Consumer Payment Choice,” Federal Reserve Bank of Boston, 2010).  Even though debit cards now are now one of the most common forms of payment – if not the most common – people still love the convenience and ease of use associated with credit cards.

The Importance of Credit Card Payments

Given how many people own credit cards and use them for many of their most of common purchases, all businesses should seriously consider having a payment system set up that allows them to accept credit and debit cards.  Whether you sell retail items to customers in a traditional brick and mortar store front, do business entirely online, or operate a production facility that sells in volume to clients, you’ll need one of the best credit cards accepting payments systems available today.  Large percentages of your revenue will come via credit card payments; you need to have a system of payment and processing set up before you open for business.

The choices you make regarding the method of credit cards accepting you’ll use depends in part on how your business is run.  If you are going to have a storefront location where customers or clients can pay for goods and services then you’ll need a credit card terminal integrated with your point of sale system.  If you do all your business online, you’ll have to arrange for online payment processing.  Once you decide that you need a small business credit cards accepting system, you’ll need to complete a series of steps before your system is ready to accept payment for the first time.

The Different Types of Payment Terminals

You’re probably already familiar with traditional credit card terminals.  A merchant or customer will swipe the credit card being used for payment; often, a series of prompts must be followed before the payment is complete.  The terminal communicates with a central system that tells you whether the card has been approved or denied.  Some traditional credit card terminals print receipts, others don’t.  Currently you can expect to pay between $90 and $130 for one of these terminals.  They can be bought at any business and office supply store or from a number of online vendors.  Larger, more complex terminals and processing equipment can be bought or leased from your payment processing company.

Wireless credit card terminals are used by taxi drivers, restaurateurs, food cart owners, and other merchants who don’t have the room for a traditional terminal or who do business in non-traditional settings.  A wireless terminal can do all the same things that traditional terminals can and offer certain business owners greater flexibility in terms of what forms of payment they can accept.

Thanks to advanced mobile computing technology, it’s now possible to turn your smart phone or tablet computer into a credit card terminal.  All you need to do is download a payment app, purchase the hardware that reads a swiped card, and you’ll be set to go.  The card reader hardware is very compact; the smallest ones are only a little more than an inch square.  If you vend your products at a lot of events or other variable locations, this is an ideal way to accept payments.  Like traditional and wireless terminals, these mobile terminals charge merchants a small usage fee.  You’ll want to compare fee rates before choosing a service.

If you do any business online, you’re going to need what’s called a virtual credit card terminal.  A virtual terminal processes and accepts payments made electronically, usually via a merchant’s website.  These terminals have some additional functions that others don’t.  For instance, it’s possible for customize the terminal to apply taxes and discounts or set up recurring payments.  If you intend to sell things through your business’s website, talk with your website designer about how the credit card payments will be managed.

Steps to Prepare Your Credit Card System

Once you’ve decided what kind of terminal you want to use, you’ll need to get it set up with a small business credit card processor.  These centers are typically affiliated with banks or with the credit card companies themselves.  Arrange to speak with a representative, preferably one that specializes in working with small business owners.  The best small business credit cards accepting agencies will have many skilled representatives who can guide you through the set up process.

You are probably already aware that there are credit card processing fees associated with accepting credit cards.  Processing and acceptance fees will be applied on a per purchase and/or per month basis.  If you’ve opted to lease your card reader equipment you have to be prepared for this expense, too.  Ask for a point by point cost breakdown from your representative.  Make sure you understand what each fee is, how much it is, and how frequently it has to be paid.  Once you sign the agreement, you’ll be ready to go!

All businesses, large or small, need to decide if credit cards accepting is right for them; given that credit and debit cards are such frequently used forms of payment, it may be the case that you can’t afford not to.  You’ll need to do some planning before your system can be set up.  Once that’s completed you’ll be ready speak with a representative from a bank or other card processing center.  After all that’s taken care of, you’ll be ready to greet your customers!