Do you use a credit card while shopping? Does your small business facilitate customers paying with a credit card? From the year 2015 to 2016, the use of the credit card has ascended at least 10.2%. Online shopping is one of the significant reasons for this tremendous increase. In addition to this, a study concluded that customers spent more money when they are paying with their credit cards because there is no fear of running out of money. So, make sure customers have the options to pay via the credit card at your store. Especially, if you are running an online business, online payment via a Credit or Debit Card is a must! But before you implement the Credit Card Processing system, you must be familiar with its ins and outs.
What is credit card processing and how does it work?
As a small business manager, you already have various duties and responsibilities on your plate. So, let credit card processing companies administer the approval, and rejection process of credit and debit payment made in person, or online. This system is dependent on the third party, to pick the most affordable and secure company, you need to understand the entire Credit Card process.
The whole process depends on the two-process: Authorization and Settlement. Five main characters are essential in Credit Card Processing:
As it is evident from the title itself, a cardholder is someone who has a credit card or debit card issued by a bank that has the authority to issue cards. Cardholders present their cards to merchants whenever they purchase merchant’s goods or get benefit from merchant’s services.
- The Merchant
Someone who sells goods and offers services and accepts payment via the credit card. Moreover, it is any business that has access to a merchant account dealing with credit and debt.
- The Merchant’s Bank (acquiring Bank)
Often times, a merchant’s bank is referred to as acquiring banks. These banks maintain contracts with the card holder’s banks and card association to operate the accounts. If you need updated credit card processing equipment for your small business, get in touch with an acquiring bank. It provides the merchant with new equipment and updated software to accept credit or debit card. Plus, it is the duty of the Merchant’s Banks to provide top-notch customer service and to take care of all the other factors involved accepting credit cards, the goal is to incorporate a customer-friendly experience.
- The Issuing Bank
The issuing bank or the credit holder’s bank offers a credit card to the customers. It is mandatory for a credit holder’s bank to be a member of the Credit Card Association. The issuing bank pays to the acquiring bank or the merchant’s bank. The payment money comes from the credit holder, in this case; it a small business owner – you. As a diligent business owner, you must clear off your pending debt on time.
- Card Association
The key role of a card association is to manage the fees and qualification criteria between issuing acquiring banks. Visa and MasterCard are responsible for the operation of the financial institution.
To sum things up, the credit card holder – a small business owner – initiates the credit card transaction by offering it to the merchant. The very merchant sends the credit details to the acquiring bank through credit card machine or software. After this, the acquiring banks transmit the transaction information to the issuing bank of the same small business owner (credit card holder). Later, the card association routes the information between issuing and acquiring the bank. After receiving the information from the issuing bank can card association, the issuer or the issuing banks confirm the validity of the credit card and bank balance. Lastly, the response code is sent back to the acquiring bank by the Visa or MasterCard.
Now, you are familiar with what goes behind Credit Card processing, it is suitable to explore the top credit card processing companies.
Whenever you are making a list of Credit Card processing companies, Square has to be on the top of it. Square is all about convenience, it allows you to accept credit card payment on lightning speed, anywhere and anytime. If you are an amateur in the Credit Card processing industry and have never worked with a credit card processing company, so we suggest you should allow your customers and employees to have a remarkable experience. The easy-to-use feature of Square makes it the most popular pick among small business owners.
In addition to this, its cost is user-friendly, its final cost is dependent on the software and hardware that you pick. The price of the hardware ranges from $0 to $999 and the price of the software ranges from $0 to $60 per month. With affordable rates and fast installments, you can get POS (Point of Sale) system with a wide range of credit card processing option for your small business.
PayPal is destined to provide credit card processing solutions for every small business. It has proven to be the best company to offer services whether the customer is making payment in person or using an online platform. If you are new to the small business industry, then get the primary POS system through this custom build credit card processor. With 24/7 customer service, PayPal is definitely worth your money.
Next on our list is Clover; it provides processing in affordable terms, doing half of your work for you. The final price of Clover depends on the software and hardware you choose. With updated processing technology, an advanced function such as bar code scanning and receipt printing, the ability to accept the payment at the lowest price you can get your hands on Clover in just $1,100.
- First Date
If you are running a business on a larger scale, then First Data should be your first pick! With affordable rates, flexible fees, and up to date chip you can get military level technology. Update your credit card processors and introduce the First Date to your business.
- Intuit QuickBooks POS
One of the best credit card processors in the market. Just like the four above-mentioned options, the final price of the tool is finalized after alternations in software and hardware. Its best deals are starting from $220 and ending at $1,200. In this price range, you can get an advanced credit processor. In addition to this, if you hate paying monthly fees, choose Intuit QuickBooks POS as your credit card processor.
Have a look at all the above-mentioned credit card processing companies, pick the one that is more suitable for your business, employees and customer. The majority doesn’t find it convenient to make payment via cash, so follow the trends and get in touch with the credit card processing company.
Last but not least, before you make the final pick, be wary of the transactional fees, scheduled fees, and incidental fees. Make you’re the processing company has a transparent and simple fee procedure, and it processes a variety of credit cards. At the end of the day, your employees and customers are your top priority. So, make sure the software of your new credit card processor is easy for them to use.
Get in touch with the best credit card processor in the market and make sure your small business is well-equipped. If you don’t want to disrupt the cash flow by paying the monthly fees, then apply for a working capital loan and quit worrying about the money. For more information about check processing and credit card processing, follow us on Facebook (@Onlinecheck) and Twitter (@Onlinecheck). If you have any question, feel free to call us on our toll-free number at (833) 827-4412, our loyal and keen financial advisor will answer every question and guide you throughout the way.