As a small business owner in today’s digital world, it’s important to offer flexible payment options to your customers. According to the Federal Reserve Diary of Consumer Payment Choice, cash payments only make up 19% of all transactions. Consumers today are using credit cards, debit cards, and mobile wallet transactions (such as Apple Pay) more than ever. Even though the COVID-19 pandemic drove more online purchases and accelerated the use of card transactions, this trend will likely continue in the coming years.
If you run a business on the Internet and sell services online, you will need some sort of digital payment processing to accept payments. However, even brick-and-mortar businesses should consider accepting credit and debit card payments to provide greater convenience to customers. Without accepting these payment types, you could potentially miss out on sales.
In this post, we’ll discuss the basics of credit card processing so you can understand the best approach for your small business.
Three Ways to Accept Credit Card Payments
There are a few different ways to accept credit card payments. The most common options to choose from are:
- Traditional POS systems
- Mobile POS systems
- Online payment processors
Traditional POS Systems
If you own a brick-and-mortar location, a traditional POS system may be best for you. With this system, you can accept different forms of payment during customer interactions, including credit card payments. There are many different POS system options that offer various different features. It’s important to research the options before deciding so you can select the one that best meets your company's needs. When doing this, make sure to consider the following factors:
- Hardware and software costs
- Customer service and support
- Potential for expansion
Some POS systems are designed for specific industries. For example, Toast and Lightspeed Restaurant are systems that have features specific to the food and beverage industry. Vend and Lightspeed Retail, on the other hand, were designed for the retail industry. Check if there are systems specific to your industry, as these may better serve your unique needs.
Mobile POS Systems
A mobile POS system is a digital device, such as a tablet, that can be setup to accept credit card payments. This type of system can be particularly useful for companies who sell goods off site, like at a farmer’s market. To get started with a mobile POS system, you can simply download the software onto an existing mobile device or tablet. You can separately purchase the hardware for credit card transactions and connect this to your device. One of the most popular mobile POS options is Square.
Online Payment Processors
Online payment processors are best for small businesses who need to accept online payments. These processers can connect to your online store’s shopping cart so customers can easily accept debit or credit card payments when checking out online. Paypal is one of the most popular online payment processers. However, many e-commerce platforms like Shopify and Etsy have these processers built into their platforms. This is often the smartest, most cost-effective solution for e-commerce businesses to accept credit card payments.
Questions to Consider When Choosing a Credit Card Processing System
If you decide to move forward with a credit card processing system, you should consider the following questions:
- What fees are involved in credit card purchases for your business on the Internet?
- What types of payments can the system process?
- How secure is the system?
No matter what payment processing method you chose, accepting additional payment methods can have a positive impact on your small business overall. Most of these are easy to set up and only require small business Internet. Spend the time to research your options and get the best deal for you and your customers.