5 Simple Steps- Accepting Credit Card Payments for Small Businesses


Sanminder Kaur10/28/2021

What is Credit Card Payments for Small Businesses?

A credit card payment is a payment made to a small business via the use of a credit card. Credit card payments are becoming an increasingly popular form of payment for small businesses, with the majority of global online shoppers preferring to pay via credit card over other forms of payment.


What are Credit Card Payments for Small Businesses?

A credit card payment is a way of paying for goods and services with a credit card, and it's a convenient and efficient way to make payments. Credit card payments are a quick and easy way to obtain the cash you need to run your business. If you're a small business, you can obtain a line of credit from a bank. A credit card payment is an attractive option for small businesses that want to process hundreds or even thousands of transactions per month. Your customers will be able to pay for your products or services with a credit card.

Why are Credit Card Payments for Small Businesses Important?

You might be wondering, "why should I care about credit card payments for small businesses?" Well, small businesses are the engine of the economy. Without them, where would the world be? For businesses, credit cards are an integral part of doing business, and it's important to know what you're getting into when you accept credit cards.

If you are a small business owner, the issue of credit card payments may seem like just one more thing on your to-do list. Who can blame you? You've got payroll, taxes, inventory, and customers to worry about, to name just a few. But there are a few reasons why you should make credit card payments an important part of your business strategy.


1. You don't want to miss additional sales possibilities that may come with credit card users.
2. By accepting credit cards you can level your field of play with competitors that accept all payment types.
3. Accepting credit cards also somewhat prove to the customers that your business is legitimate.
4. Credit card transactions are reasonably quick to process, therefore they are settled in your account much sooner than checks.
5. Credit card payment processing is not easy to install but isn't difficult either. You just need to understand that a lot of businesses end up over paying for credit card setup because they don't follow appropriate steps. The step-wise approach mentioned below will prove to be helpful in successfully establishing your credit card payment setup.

1. Finding a Payment Processor

In order to accept payments from your customers, you will need to use a payment processor. A payment processor is a company that provides you with a way to accept payments using Credit Cards. A processor will handle the step between when a customer pays you and when you receive the funds from that payment.


Finding a payment processor can be a task that requires thorough research at your end. Most processors offer either of the two kinds of processing services- full-service merchant accounts or aggregated accounts with payment service providers (PSPs). Both approaches have their own pros and cons when it comes to accepting payments.


When you use a payment service provider, you might get quick service with predictable flat-rate processing fees on transactions. But in this case, you have to make do with minimum Customer Service support. Also, when your monthly transaction volume is higher, the flat rate price becomes less cost-effective.


Full-service merchant accounts offer better stability and charge low processing rates as compared to the PSPs. They require contracts and approvals for an account which can be a time-consuming as well as an expensive process. There is no right or wrong in both these methods. You can thoroughly analyze both these ways and then go ahead with the choice you find best.

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2. Negotiate Terms and Rates

After finalizing the payment processor the next step is the negotiation of the transaction rates as well as terms. Make sure you are aware of all the hidden charges, transaction fees, contract renewal fees, pre-transaction fees, incidental fees etc. You may not be able to rightfully compare the prices as all models offer different services. But you may want to make sure that you have the liberty to terminate your contract with the payment processor at your will, so that even if it doesn't work out well you don't need to be stuck with it for a specific duration. There are four different kinds of processing plans- interchange-plus and subscription models disclose the provider's markup but tiered and flat-rate pricing do not.

3. Choosing Hardware and Software

Unless you only want to do business online, you will definitely need some equipment to run your operations and payment processing smoothly. Depending on your business type, you may require a Pos Solution with cash drawers and integrated Payment Technology, or even mobile devices to take tableside orders. The hardware and software definitely do not come free of cost. It is an investment that you need to make into your business. You can either purchase the point of sale system and the software or rent it. Either way, the software is an additional purchase. Be wary of any "free" service you get in terms of card readers or any other equipment, because usually they come with hefty hidden charges that you may not have accounted for.

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4. Launching Business

This actually means launching your business out in the open. It could be an online one, a transactional website, a brick-and-mortar outlet, or anything that eventually leads you to deal with customers and process operations. During and after the launch you will hopefully get to use your credit card processor multiple times.

You will work with customers who are loyal to your business and are repeatedly visiting your store, you may also encounter some fraudulent transactions and some failed transactions too. Just don't let this affect you too much because all this is a part of credit card payment processing. These inconveniences will seem to be nothing when you see your sales graph rising.

5. Track Monthly Statements

Monitoring your monthly transactional statements is one of the most important steps in recording the growth of your business. This needs to be done at regular intervals in order to check your processing charges because at times merchants add incorrect charges accidentally. Raising such concerns early will get you full refunds for your payments. Carefully catching such errors can give you a timely solution to the problems.

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