Online, In Person & Phone

The number of credit card payments has surpassed cash payments for years, and that trend is unlikely to stop anytime soon. Official credit card More than cash in 2020. Every year more and more transactions are paid for by card.

So, if you don’t accept credit card payments yet, what are you waiting for? Let’s break it down.

Why pay with a credit card?

From a consumer perspective, paying with a credit card has the following advantages:

• Easier to track spending. Credit card statements make it easier to see where your money is going.
• Potential to earn rewards. Close to 15% of cardholders spend more to earn rewards and cash back.
• Additional security (such as refunds). Most credit card companies offer protections such as fraud detection and chargebacks.
• Build a credit history. According to one poll70% of adults ages 18 to 34 use a credit card to improve their credit score.
• Purchase Guaranteed. Some credit cards offer benefits that protect purchases, sort of like an extra warranty.
• Ability to spend more money. With a credit card you can purchase more than you have cash on hand. About one-third of U.S. cardholders Increased reliance on credit cards By 2023, 43% of people negatively affected by rising cost of living will turn to credit cards to make ends meet.

Accept different types of credit card payments

There are three main channels for accepting credit card payments:

1. online
2. face to face
3. by phone

How to accept credit card payments online

almost one-third of consumersUse a credit card for e-commerce payments. Here’s how to prepare for these buyers:

Step one: Choose a payment processing platform that is compatible with your existing technology stack.

Step 2: Set up your account with the payment processor of your choice. Connect your e-commerce website with a payment processor. Specific steps will vary depending on your e-commerce platform and payment processor.

notes: You don’t actually need an e-commerce website to accept credit card payments online. You can find credit card payment processors that can do this without an e-commerce website. Many companies offer this service, including PayPal, Stripe, and others.

Step 3: Connect your bank account to your payment processor.

Step 4: Share a payment link with your customers, who can then enter their payment information.

Step 5: The payment processor will handle the rest!

How to accept credit card payments in person

For in-person credit card payments, the steps are similar:

Step one: Choose a payment processing platform that’s compatible with you card readerPOS systems, and any other systems you use to manage in-person transactions.

Step 2: Set up your account with the payment processor of your choice. Connect your card readerPOS and other payment processor-related technologies. The specific steps will vary depending on the platform and payment processor you choose.

Step 3: Connect your bank account to your payment processor.

Step 4: Accept in-person credit card payments at card readers or POS.

Step 5: The payment processor will handle the rest!

How to accept credit card payments over the phone

For accepting credit card payments over the phone, the steps are similar:

Step one: Choose a payment processing platform that is compatible with your existing technology.

Step 2: Set up your account with the payment processor of your choice and connect your other related technologies to it. The specific steps will vary depending on the platform and payment processor you choose.

Step 3: Connect your bank account to your payment processor.

Step 4: Make a credit card payment over the phone and enter it into your payment processor.

Step 5: The payment processor will handle the rest!

What does it take to accept credit card payments?

The only things you really need to accept credit card payments are a payment processor, a payment gateway, a bank account, and a device to access and manage your payment processor.

For online payments, you may also need a payment link or website. For in-person payments, you’ll also need at least a card reader, POS, or mobile phone. For paying by phone, you’ll need a phone and a device to access your payment processor.

You’ll also need a credit card payment policy that outlines the terms and conditions customers agree to when making credit card payments. If you store your customers’ payment information to make future purchases faster and easier, include a Credit Card On File (CCOF) policy.

How much does it cost to accept credit card payments?

Unfortunately it’s not Accept credit card payments for free. Accepting credit card payments creates three costs for your business.

interchange fee

The customer’s card-issuing financial institution charges an interchange fee, which is usually the largest of the three fees. It will vary depending on the card used and the type of transaction.

Appraisal fee

Each card network (Visa, Mastercard, American Express, Discover, etc.) charges its own fee, most of which are based on a percentage. American Express is known for charging higher fees than many other networks.

payment processing fee

Payment processors also charge fees. The fee structure for payment processing can be a subscription-based fee, a percentage fee, a tiered fee, or a fixed fee.

Typically, you can expect to pay 1% to 3% on credit card payments, but rates may exceed that range depending on the circumstances.

Advantages of accepting credit card payments

There are many benefits for businesses that accept credit card payments:

• Boost sales. Meeting more consumer preferences means you have the potential to convert more customers. In addition, consumers are Stay away from cash and credit card and other payment methods.
• Speed ​​up checkout. Cash payments may take longer than quick credit card payments. This is especially impactful considering 41% of POS payments It’s via credit card.
• Provide convenience. Faster checkout speeds and additional features such as saved card information create a more convenient checkout experience for customers. Exceed Half (63%) Adults 55 and older use credit cards primarily for convenience.
• Increase loyalty. Meeting customer preferences and providing a fast, easy checkout experience will encourage repeat purchases.
• Eliminate checks. While accepting credit cards doesn’t mean you can’t accept checks, it does provide an option to move away from paying by check, which can be time-consuming and difficult to manage.

Disadvantages of accepting credit card payments

On the other hand, some of the disadvantages of accepting credit card payments include:

• Additional charges apply. The cost of processing cash payments is zero compared to unpredictable credit card payment processing rates.
• settings. Preparing to accept credit card payments takes time and investment, and not every business has this luxury.
• Safety. Credit cards expose businesses to more potential risks fraud, This could cause damage to their business.
• Refund. Chargebacks are another costly risk with credit card payments.

Popular credit card payment processing solutions

If you are looking for a credit card payment processor, I recommend checking out the following:

• Chase Pay: Provides payment processing, POS systems and online payment gateways.
• Clover: Provides payment processing, capital advances, employee management and customer engagement programs.
• help me: Includes merchant accounts, payment gateway services, and POS solution.
• PayPal: I like that PayPal accepts multiple payment methods, including international payments.
• square: A complete set of hardware and software, especially suitable for face-to-face payments, but it can also be adapted to online payments.
• stripe: I personally love Stripe’s versatility in terms of integrations, customization, and payment methods.

This article was reviewed by retail and payments experts Megan Brophy.