Accepting credit card payments increases in-store sales by 40 per cent, compared to cash payments alone, and is necessary for businesses selling online. This guide shows you how to accept credit cards in a brick-and-mortar store, on a website, and over mobile.
The way you accept credit cards will depend on where you’re taking the payments. To accept credit cards in store, businesses need a card reader and a merchant account. To accept credit cards online, businesses need an e-commerce site and a payment gateway.
All businesses can choose between two options for accepting credit cards:
An all-in-one provider that has a solution for each step of the process
Select individual providers for separate POS systems and merchant accounts
Here is a step-by-step guide for how to accept credit card payments.
Select PoS system
A PoS system is a software system that serves as the central hub of your business. PoS systems manage transactions, track inventory, and provide business analytics. It is important that we choose a PoS system first because some systems have built-in payment processing to accept credit card payments. If you are selling in-person, you will need a PoS to help manage customer interactions.
If you’re selling online, you need a digital or e-commerce PoS platform that will let shoppers purchase from your site. In either case, you can choose from an all-in-one solution that has built-in payment processing or a POS that will require third-party payment processing.
If you are a small business and for the sake of simplicity, we recommend choosing an all-in-one solution that has POS, payment processing, and merchant services built in. However, if you are a larger business or have a higher sales volume ,you may want to consider using a separate merchant account.
Select merchant account (if not using all-in-one system)
Traditional merchant services providers are a good option for higher-volume sellers since their credit card processing fees tend to be lower than all-in-ones. If you want to go this route, it’s important to understand the different fees they charge because they’re not as straightforward as the all-in-one providers. Along with the credit card processing and transaction fees, you might have an account fee, a gateway fee, fraud prevention fees, and more. Therefore, always make sure you’re clear on both the processing fees and any added fees when considering a traditional merchant services provider.
Select payment gateway
When an online customer enters their credit card information in your online store’s checkout page, the payment gateway encrypts, or secures, the information and sends it over the internet for approval via your processor. The purchase is approved or declined instantly. If approved, your online store completes the sale automatically and your merchant account provider deposits the funds into your account, generally within one to two days.
Many payment processors include a payment gateway with their service. Other require a separate payment gateway account.
Purchase needed equipment
The type of equipment you need will vary based on where you are selling. If you plan to sell in-person, whether it’s over mobile or in-store, you will need a card reader. If you are selling online, you won’t need any physical hardware.
Here are the details on what equipment and hardware you need to accept credit cards:
In-person in-store and mobile credit card payments require card reading equipment that allows you to swipe a card physically.
Businesses can also purchase additional credit card readers to accept tap and chip payments.
Online e-commerce and virtual terminal credit card payments use a payment gateway that lets customers or sales staff enter credit card information into a secure online form. So, no physical hardware purchases are necessary.