How to Accept Credit Card Payments Both In-Store & Online

Jin Hyun9/8/2020

From sophisticated POS software to payment gateways, there are a plethora of methods for businesses to accept card payments both in-store and online. By exploring the variety of options available and implementing the appropriate platform for their operations, companies can boost customer satisfaction while increasing their revenue and reducing security risks.

In-Store vs. Online Payments

Regardless of the industry, more and more customers are now opting to pay by card rather than cash. In fact, The Federal Reserve Bank of San Francisco recently reported that customers pay with physical bills just 35% of the time.

While credit card transactions are the preferred payment method overall, the transaction details will differ depending on whether the business aims to cater to in-store or online shoppers.

For physical stores, credit and debit transactions can be made using a card reader or even a virtual terminal, while online payment methods usually require a secure payment gateway.
Explore the requirements for both payment methods below.

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In-Store Payments

  • Card Reader or Terminal - These devices can read a client's card details with a simple swipe, chip insert, or tapping motion. The reader can either be a stationary terminal or a portable attachment for a smartphone or tablet device.
  • Virtual Terminal - Businesses without a physical card reader or POS terminal can also accept payments by manually typing in the credit card information into a smartphone or computer. This is also an excellent option for accepting payment over the phone.
  • Point-of-Sale Software - The POS software charges the exact amount to the client's chosen card and provides the option to leave a tip. This tool can also collect emails, track purchases, manage receipts, and more.

Online Payments

  • Storefront - It's vital for virtual stores to create an easy-to-navigate storefront that showcases exactly what goods or services are on offer.
  • Shopping Cart - Once those customers have found and selected their purchases, the items are then bundled into a virtual shopping cart. This clearly displays each product and the total cost of the order, minus tax and shipping expenses, which are added at the checkout stage.
  • Payment Gateway - A payment gateway is often included in POS software and provides a secure way for clients to complete their transactions online.

3 Ways to Accept Credit Card Payments

With the rising popularity of cashless payment options, it has become crucial for businesses of all sizes to offer a seamless payment process to avoid losing potential clients. Explore the 3 most common methods of accepting card payments.

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1. Obtain a Merchant Account

Unlike a regular bank account, merchant accounts can be obtained via a merchant acquiring bank. This account enables businesses to accept credit and debit cards, as well as other electronic payment methods.

The merchant bank will essentially work as a mediator between the card company and the business by confirming payment authentication and other technical processes. After the electronic payment has been authorized, the client's bank will release the precise amount into the merchant account.

Before attempting to open an account, businesses will also need to determine which credit card providers they will be working with and the merchant acquiring bank. The bank will typically require business information, such as-

  • Banking Details
  • Tax Returns
  • Payment Model
  • Business Activities
While this may seem convoluted, the merchant account payment option can actually be more cost-effective in the long run when compared to a flat-rate alternative. However, they usually require multi-year contracts so businesses cannot resort to changing partners freely.

2. Implement a Payment Service Provider

Merchant bank accounts may be cost-effective, but they can also be time-consuming. For a quicker and more seamless option, payment service providers are a great solution as they enable a business to take credit card payments without the hassle of setting up a merchant account.

Payment service providers typically ask for a flat rate fee which has the key benefits of an easy setup and no long-term contracts. On the other hand, the transaction fee can get pricey as the bulk of payment service providers charge upwards of 2.9% for businesses peddling less than $1 million in revenue each year.

3. Opt for an eCommerce Platform

This is a great solution for companies that operate predominantly in the online realm as it enables them to receive payments via a chosen e-commerce platform that already has built-in payment processors.

To utilize this option, companies can begin by launching the store and then either creating their e-shop from the ground up or adding an e-commerce capability to an existing website. An employee identification number and banking information may also be required for setup.

6 Reasons Why Companies Should Accept Credit Cards

There is a wealth of reasons for businesses to accept credit card payments. Explore the 6 key reasons below.

  • Increases Sales and Revenue
Studies show that customers spend up to 18% more when they pay by credit card, which means providing card payment options can directly lead to increased transaction value.

  • User-Friendly Client Experience
Giving customers the option to pay by card infinitely improves their shopping experience while generating loyalty - especially given the overall client preference to pay by card.

  • Boosts Cash Flow
Credit card payments are now processed within seconds and often appear in the company's bank account within just one working day.

  • Time-Saving
Tapping or sliding a card is one of the fastest ways for clients to complete a purchase. This means customer wait times can be minimized to further enhance the shopping experience.

  • Increases Security
For brick and mortar businesses, keeping less cash on the premise is always a smart security move. Furthermore, with a secure credit card payment option, businesses can prevent fraudulent charges while protecting consumer information.

  • Enables Useful Data Gathering
Many credit card payment processors offer in-depth transaction data to companies through the point of sale system. This means businesses can have immediate access to insightful data such as client payment methods, average transaction value, and more.

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