Knowing how to accept credit card payments is the first step in ensuring your business is on the right path to providing customers with the modern payment experience they expect.
Cash is no longer king among consumers, and many businesses are following suit by embracing a cash-free model. Equipping your business to accept credit card payments is getting increasingly more complex as security regulations and technology offerings evolve. Luckily, as the industry changes, so do the number of payment partners ready to help make the art of accepting credit card payments easier.
Knowing how to do so starts with one basic concept that all merchants must first check off their list: Getting a merchant account. To help guide you through the basic steps of this process, we’ve broken down what you need to do to accept credit cards.
How to Get A Merchant Account to Accept Credit Card Payments
All businesses that process credit cards must have a merchant account. A merchant account serves as the bank account to accept credit card payments — allowing for a proper place for your customer payments to flow into. With the right payments partner by your side, setting up a merchant account is a seamless process.
A merchant account requires your business to provide three key elements: Bank information to prove the stability of funds, the ability to verify the legitimacy of your business, and proof of security details. A merchant services provider will want to verify that you have an account associated with your acquiring bank that manages the general flow of your credit card payments. Banks, issuers and payment processors then need documentation that you’re a legally established business. These pieces are critical in the credit card payment puzzle.
For businesses that want to accept credit card payments online, you must take the steps to have proper security details, or what’s called SSL certification. When using a web server, an SSL certification allows for secure connections (https protocol, etc) to ensure activity from your server to your browser if protected. This protects credit card numbers, usernames, passwords and any other sensitive customer data that may be shared on your site.
Setting Up a Merchant Account to Accept Credit Card Payments
What’s important to know about setting up a merchant account is engaging in the right relationships. A merchant account can be established once you’ve got a payment processor set up to accept payments through. Once a credit card processing company is chosen, merchants can apply for a merchant account, which is typically processed through a sponsored bank.
A payment processor allows for funds from credit card purchases to be deposited into a merchant account. A merchant account can be established online, but you must find a payment processing partner, like Payline, that has a sales representative on hand to negotiate the right type of contract for your business. Terms for merchant accounts vary based on the level of risk associated with your type of business. Your risk is assessed based on what types of goods/services you provide, how many transactions you process on a monthly basis and how much revenue you manage.
A merchant account serves as the bank account that allows business to accept credit cards. As the core piece of the credit card processing equation, the merchant makes the transaction flow between consumers, merchants, processors, and banks possible. Merchant accounts allow for the reconciliation of funds between a business’ account, customers and the credit card issuer. A payment processor approves a payment, but the merchant account is responsible for ensuring those funds get into the bank accounts.
Payment processing companies, like Payline, can provide a one-stop shop for payment processing and a merchant account. Working with a provider that can check off both these boxes can help streamline the process and get your business to accept credit card payments faster. A one-stop shop for your payment processing partnership can also offer your business the necessary equipment needed to accept credit card payments.
How to Accept Credit Card Payments and Process Payments Properly
Knowing how to accept credit card payments is also about having the right relationships involved in the process to make the transaction possible. Of course, this process is triggered by the cardholder, but there are four key relationships that make it so those funds get into your merchant account.
Your business is responsible to ensure transactions are completed in a timely and secure manner. Not doing so can damage your customer relationships and your ability to secure payment processor partnerships. The next relationship in this process is the acquiring bank, which is the financial institution that acts on behalf of the merchant to process your credit card payments. Securing a relationship with your acquiring bank and getting a merchant account quickly is the fastest way to get your Merchant ID (MID) and start accepting credit card payments.
On the other end of the payment equation, there is the issuing bank that is associated with the credit card network itself (Visa, MasterCard, Discover, and American Express). These networks facilitate how transactions occur between merchants and the card issuers. Having the right payment processing partnership to manage the ebbs and flows between each of these parties allows for better relationships with your banks and card networks that allow your business to properly accept credit card payments.
Since a payment processor allows transaction data to move across your business’ payment terminal or payment software, this is the key piece in ensuring this transaction properly passes through the card network and issuing bank. An issuing bank is tasked with authorizing the transaction through the card network and payment processor. When these details work together the end result is a seamless payment between customers and your business.
Properly processing payments comes with checking off key features on your credit card payment list. When choosing your payments provider, it’s important to ask yourself: Is your processor equipped to help you fight chargebacks? Do they provide tools for fraud protection and enhanced data security? Do they have ample options to help you seamlessly onboard online and offline payment options? Do they have the right financial institutions partnership? Once those items are checked off your list, you’ll be on your way to accepting credit cards properly.
The process to accept credit card payments requires a lot of moving pieces on the backend of the payment equation. Your responsibility as a business isn’t to worry about the nitty-gritty factors of credit card payments. Instead, you should enlist the right partner to manage that process for you. Let the payment experts at Payline show you how this process can be easier when you focus on your business, and we focus on making sure you get paid.
That’s why we’re here — to ease you through the merchant account process so you can accept credit card payments easier, faster and secure manner.
Anna Kragie is a content contributor for Payline Data. She previously wrote for PYMNTS.com, as a Sr. Content Producer, where she focused on financial services and payments innovation, fraud and security, emerging payments, and FinTech news, research and thought-leadership content across the payments industry.