You’ve had a little success with your start-up business, and you’d like to include a reliable payment processing tool that does not involve cash. You want a secure credit card processing company that’s easy to install and safe to use. Scouting for the right card processing firm can be a daunting task if you do not know what you’re looking for, especially since thousands of companies are offering these services.
- How do you pick the right one?
- Whom can you trust?
- What about costs?
- Do you have enough funds to set up a card processor?
On a positive note, credit card payments will make you more sales than cash sales because consumers run credit and debit cards for all types of purchases, more so impulse buyers. And you want to maximize the purchasing power of every consumer that checks in your store and your website.
Let’s dig right in and see the options for selecting the perfect card processor for your small business.
Before we delve into the main features to look out for, you need to pick a card processor with low rates, no extra fees, and a monthly contract for a start.
Right, so now that you have a basic idea of how to select a suitable card processor, we shall give you a step by step guide to help you make the right decision.
Table of Contents
Determine the Right Processor for Your Small Business
To acquire the right credit card processor, consider these critical factors:
- Do you prefer a partnership agreement with a merchant service for businesses?
- Do you have a sizeable client base that’d be happy to make credit card payments?
- Are you comfortable with online credit card processing?
If you’re a sole proprietor, accepting payments from a relatively large trusted client sources, go for Venmo, which is ideal for peer-to-peer transactions.
If you make less than $3,000 per month in average sales, payment processors like PayPal or Square offer excellent choices. These payment facilitators are affordable and don’t charge monthly or annual account fees to enjoy the services.
Credit Cards Acceptance Options
Here, you have two scenarios:
- One is where you have a significant number of customers visiting your physical store, and they would prefer credit card payment options.
- Two which is where you have online visitors.
The latter prefer to pre-order stuff and have it delivered to them in the comfort of their homes while making credit card payments or other options like PayPal.
Once you determine the most popular payment method with your customers, you need to make arrangements with a suitable credit card processing company for the equipment to be installed in your store.
Credit card pricing and fee structures differ significantly from one company to another. Once you set out your spending budget, select a company that doesn’t charge more than 3% of the transaction value plus a surcharge, determined by your monthly sales volume, payment processing history, industry, and average ticket size.
Card Processing Options
Square is suitable for small businesses with low volume sales looking to grow their businesses and expand into larger pools of credit card purchases with online payments.
With Square, you can select 3 preferred credit card processor options:
Shopify works well for eCommerce business owners looking to set up an online store. It has better-operating tools than Square, but on the flip side, it’s quite pricey with costs ranging from $29 a month for a basic plan.
Shopify also charges a fixed rate processing fee of 2.9% and an additional charge of $0.3 per transaction. Billing is monthly with a yearly discounted price.
Purchasing Decision – Quotes and Contracts
Once you have reviewed all of the above options, call your preferred processors and request a detailed quote. You can also negotiate for the right price if you’re confident that your sales will validate a competent rate, and you can get a better quote elsewhere.
With the best prices in tow, ask for a contract copy from at least three companies to compare the terms of service.
Review all contracts cautiously. If possible, get a lawyer to explain some of the legal terms and important factors like:
- Renewal conditions
- Termination fees
- Any other binding clauses
After going through all the contracts, pick a suitable one for your small business, and close the deal with the relevant processing company.
When the processor reviews your application and is ready to sign the contract, they will instruct you to sign up for a credit processing account and take you through all the processes of picking suitable card processing machines for your business. The company will also help you to set it up on your premises and test it.
Using Smartphone to Process Credit Cards
Yes. This is an excellent option for frequent travelers and businesses that want to accept credit card payments from anywhere.
You need a mobile card reader to access the mobile phone processor. Just plug a cable onto your headphone jack or connect via Bluetooth.
Most companies provide free card reader once you sign up with them, but if you don’t get one with your processor, just buy one that is NFC enabled and accepts EMV chip cards for secured transactions. Popular mobile card readers go for under $100.
Another key advantage of using a mobile card reader is that it helps you keep track of your sales inventories, which are vital for small businesses.
Online Credit Card Payments
With online credit card purchases, you need a “payment gateway” for regular online sales. Typically, processors charge an additional fee to facilitate this service monthly.
So online payments work well with small entrepreneurs with a fully-fledged online store with regular sales; otherwise, the third party fees for gateway fees can eat into your profits if you don’t have the right numbers to cater for the extra cost.
The best way for a small business to take up credit card payments is to sign up for low-cost processors depending on your sales situation. Go for flat rates monthly without the excesses of maintenance fees and stay away from long–term contracts to avoid early termination fees.
Choosing a low-cost credit card processor for your small business ensures that your customers enjoy your service delivery by accepting credit card payments. You also enjoy reasonable profit margins by minimizing processor fees.