how to accept credit card payments for your small business

How To: Accept Credit Cards With Your Small Business

Do you run a small business? If you don’t accept credit cards, you could be losing out on sales. Many people don’t write checks today, preferring to use online bill pay and credit or debit cards to make all their purchases. If you don’t provide an easy payment option, you’ll lose those sales.

Additionally, you can lose impulse sales if people have to take the time to write a check — or don’t have the money at that moment to pay cash. So many people use rewards credit cards today that, if you don’t accept credit cards, shoppers may buy from your competition so they can earn rewards points on the purchase.

Whether you run a brick-and-mortar business or an e-commerce website or other Internet business, you can increase sales by accepting credit cards. The money you’ll make will offset the service and transaction fees associated with credit card payment processing.

There are a number of ways to accept credit card with your small business.

  • Through Google Wallet, Paypal or another online payment gateway
  • Setting up a merchant account through a bank
  • Using a merchant account service

Accepting Credit Cards through an Online Gateway

The first option, to use Paypal or another website service to accept credit cards, is the easiest way to accept credit cards with your small business, but you can only use it for online sales. Simply set up a professional account (personal Paypal accounts do not provide the option of accepting credit card payments) and then include a “Pay with Paypal” checkout option on your website.

Other payment gateways include:

Transaction fees vary. So make sure to shop around to find the best deal for your particular business.

Accepting Credit Cards through a Bank Merchant Account

If you want to accept credit cards in a brick-and-mortar store, or if your business provides services locally and you want to give your customers the option to pay by credit card, you can set up a merchant account with a bank.

If you have an established business, have been making sales for a while and have a good credit history you can contact your local bank about setting up a merchant account. You’ll also need to show low numbers of returns — banks don’t want to take a chance on a company that may have a lot of chargebacks. You’ll need to buy your own terminal through a third-party provider and you may not get the same level of customer service as if you went through a merchant account service.

Especially now that many banks are providing retailers with mobile card readers similar to a Square, getting these services from the same bank handling your checking account and payroll is becoming more accepted in the small business community.

Accepting Credit Cards through a Merchant Account Service

The most common way (after online payment gateways) to accept credit cards with your small business, a merchant account service provides you with everything you need to get started accepting credit cards — including customer support if you have a problem.

A merchant account service may even provide a credit card terminal free as part of your account set up. Otherwise, you can lease or purchase a terminal from the merchant account service. When you work with a merchant account service to accept credit cards, you can expect to pay:

  • a monthly fee;
  • a flat-rate transaction fee; and
  • a percentage for each transaction

Some merchant account services also charge:

  • an application fee;
  • a setup fee; and
  • a monthly fee to lease a terminal

When you shop for a merchant account service, you’ll want to consider:

  • The level of customer service/support (should be 24/7)
  • Initial costs, plus monthly fees and transaction fees
  • The prices for terminals, and what types of terminals they offer
  • What credit cards you can accept — you may want a service that permits you to accept Mastercard, Visa, American Express and Discover, or you may only be interested in accepting Mastercard and Visa.
  • Finally, you’ll want to decide what type of credit card transactions you want to accept, because you’ll need a different terminal for each.

Credit Card Terminals

You need to decide what type of credit card terminal makes the most sense for your business. What works best for you may depend on whether you operate out of a physical store, are mobile and visit clients, or process only phone or mail order payments.

The different types of credit card terminals (also called point of sale solutions) are:

  • Credit card terminal (wired) – Used in a conventional retail setting, this credit card terminal operates via a modem to send the information to your merchant account service. The preferred option for brick-and-mortar stores.
  • Virtual terminal – Used for phone or mail order sales.
  • Payment gateway – Used for online sales.
  • Wireless terminal – Used for trade shows or businesses who want to provide an actual credit card terminal on the road; you may pay wireless access fees each month, as well as the other fees.

Getting Started

A Google search for “merchant account services” will yield a myriad of options for accepting credits cards with your small business.

Personally, we found that we got great rates and service through both QuickBooks and Costco. And we recommend that you start there when looking for payment processing.

Wireless POS Solutions

For a couple of years, Square lead the way in offering a portable and cheap (well, except the fees!) card reader for small businesses. But now most banks and merchant account providers are offering similar products.

Still, these older articles will give you a general idea of the convenience and versatility of using a wireless card reader in your business:​


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