Accept Credit Card Payments Online In Small Businesses
A sale is not a complete sale until the funds change hands. To get in on the $601.5 billion (and boosting) of retail purchases that perform via the internet. Your eCommerce business needs to accept credit card payments online.
Small businesses can accept credit cards online by using an online payment gateway, setting up a POS system with a merchant account, or using a mobile card reader to accept credit card payments online via a mobile app. Understanding how to accept card payments online can assist small businesses to enhance their sales. Improving cash flow, and offering a better experience for their customers. But recent research found that 55% of small businesses in the US don’t accept card payments online.
How to accept credit card payments online for small businesses?
Small businesses interested in taking credit cards first have to do some research and decide what credit card payment modes work best for them. These are the moves to follow to initiate processing credit card payments:
Ways to accept credit card payments online
Firstly, decide how you’ll enable your customers to pay using credit cards. These are the three primary ways to accept online credit card payments.
- Online credit card payments
- In-person credit card payments
- Mobile credit card payments
If you are a freelancer who usually executes business with customers remotely via email and mobile phone. Also accepting online card payments may be the only way your small business needs. If you have a physical store that markets products to customers. You’ll have to take in-person credit card payments at your online store.
And if you are a contractor or landscaper functioning on-site for your customers. A mobile card reader may be the most simple payment method since it enables customers to pay from the job website with a card reader powered by your mobile phone.
Prefer a Merchant Service Provider
After knowing how you’ll take client credit card online payments, you will have to prefer a merchant service provider. Merchant service providers are companies that offer businesses the products and services required to take credit and debit card payments. When assessing merchant service providers for your business, it is necessary to ask yourself the given questions:
- What fraud protection do they deliver?
- Do they provide other related services, like payroll services?
- What sorts of payments can the MSP process: online, mobile, in-store?
- What costs does the MSP assess the business owner?
Select a merchant service provider that fits the exact requirements of your business and charges fees you are easily paying.
Online payment gateways
A payment gateway is a technique that enables merchants to process the transaction including credit cards, debit cards, and alternate payment methods such as eWallets. The term “payment gateway” also consists of physical tools like credit card terminals. So professionals distinguish between payment gateways and online payment gateways.
In this blog, we will concentrate on online payment gateways which offer the software eCommerce merchants require to receive payments via their websites.
How do online payment gateways manage a transaction?
How does an online payment gateway function? Here is the procedure a payment gateway performs to assist a merchant in accepting credit card online payments:
- A customer picks a product to buy and obeys the prompts to the payment step. And delivering a credit card number and approving details.
- The payment gateway’s software protects transaction data and securely shares it with the online payment processor, generally a bank-designated “acquirer.”
- The acquiring bank ways the payment request (again with stringent data security) to card processing networks. Major credit card companies work with these networks; typical examples are Visa and Mastercard.
- The card network confirms the card details. Adding another fraud inspection to the procedure. Then it presents a payment request to the card-issuing bank.
- The issuing bank conducts another fraud check and proves that the customer has enough money for the sale. Then it either approves or rejects the request and transmits that conclusion back to the payment gateway.
- The gateway notifies the customer and the merchant about the results. If the payment is received, the banks concerned recompense the payment. Also implies they transmit the funds from the customer to the merchant.
This complete procedure and up to the settlement is actually immediate. (On the other hand, settlements can take some days). The payment gateway serves as a link between your customers, your website, and the payment networks that perform online funds transfers possible.
When an online payment gateway enables merchants to accept credit card payments online via their websites. Even the payment cards are not the only way customers will prefer to purchase your products.
How to Accept Online Card Payments
To accept credit cards online, you will have to sign up for an online credit card processing service. This service functions by processing your customer’s online payments for you and assessing a processing fee for every credit card transaction your business receives. If you prefer a cloud-based accounting service. Maybe you already have the facility to accept online credit card payment solutions via app integrations within your online accounting software.
How to Accept In-Person Credit Card Payments
To accept in-person credit cards, you will require a POS (point-of-sale) system. A POS system consists of hardware (like a credit card reader) and software to accept in-person credit card payments. Customers can insert or swipe their credit/debit card in a card reader and the transaction will instantly be authorized or rejected. After the approval of a transaction, your merchant account will then accept the funds. And then forward them to your business bank account within a few days.
How to Accept Mobile Credit Card Payments
To accept mobile credit card payments, you will require a mobile card reader. A mobile card reader is a movable device that pierces into your smartphone and teams with a credit card app to accept credit card payments online anywhere, as long as there’s an available internet connection.
Why Should Businesses Accept Online Credit Card Payments?
Accepting online credit card payments delivers leniency and convenience to your customers and can also provide advantages to your business. The advantages of receiving credit card payments for small businesses are:
- Enhances Sales. Accepting online credit card payments is an advantage that can assist you in tempting new customers to your online business increasing your sales. If you have an online business that deals in products, accepting credit cards online can result in enhancing sales because people manage to spend more when they are using a credit card. A current study discovered that people consume between 12 and 18% more when they use credit cards instead of cash.
- Enhances the Customer Experience. Delivering personalized payment choices that contain credit card payments provides your customer with a better experience and enriches credibility. Most customers like to pay using a credit card because they can easily perform online payments, instead of filling out and mailing a check.
- Boosts Cash Flow. Unlike checks, which frequently bear between 6 to 10 business days to perform via your bank, credit card payments are processed fairly fast. Usually, online credit card payments are vacated and the funds occur in your business bank account within 1 or 2 days of performing the transaction.
- It Saves Time & Effort. Most credit card payment processors enable you to accept credit card payments online with a few easy clicks, preserving your time & efforts. You don’t need to reach the bank to submit checks or expend as much time asking for payment for invoices.
- Enhances Payment Security. Accepting online credit card payments can indicate your business has less cash in hand. However, it reduces the risk of theft or loss. Even though there are security risks with receiving credit cards. In many scenarios, fraudulent charges can be retrieved when you use a merchant service provider.
- Delivers Proper Reports. Most online credit card processing services offer powerful sales on the basis of your transactions. You can collect valuable data about the kinds of payment clients use, how long it takes them to pay and the average payment amount your business takes. These reports also contain details that are useful when you submit your taxes.
Credit Card Transaction Fees
Credit card transaction fees are assessed by the payment processor every time a business takes credit card payments. There are two kinds of fees assessed for every credit card payment that’s performed: the processing fee and the transaction fee.
The processing fee is an amount charged for every payment on the basis of the business’s average transaction amount. Whereas, the transaction fee is a flat fee assessed every time a business accepts credit card payments.
Wrapping Up
In this digital market, it is familiar for most online businesses to accept credit card payments online. Moreover, credit cards are a fast and easy way for customers to pay for products and services. However, businesses can take advantage of improved cash flow and sales ratio. While there are some risks and charges included in using this payment mode, the advantages mentioned above in this article overshadow those scams. Contact Instantcharge today if you are interested in knowing how we can assist you in protecting your customer’s sensitive payment details, following PCI DSS compliance rules, and boosting your business.