Credit Card Processing: What You Need to Know About Credit Card Processing Companies

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66 percent of in-person sales transactions are processed with a credit card. It’s more important than ever for companies, especially small businesses, to have a way to process credit cards. There are a lot of credit card processing companies, so be sure to know what to look for.

Nearly 55 percent of small businesses do not accept credit cards. With more than half of transactions using credit cards, the question is why aren’t more small businesses accepting them?

Do you want to discover more about card processing? Keep reading to find out key facts of small business credit card processing. And learn why your small business should utilize it.

Small Business Credit Card Processing Facts

There is a lot of information out there regarding credit card processing. How do you know what’s accurate and what’s exaggerated? How do you choose a processor?

A few things to consider when researching credit card processors:

  • Payment terms
  • Equipment needed
  • Associated costs and fees
  • Differences in in-person and mobile transactions

Each of these topics is an important piece in deciding what credit card processor is right for your small business. Or to decide if you should even have credit card processing available. Find out more about each of these topics below.

Payment Terms

Before choosing a payment processor, you must understand the terms! Do they charge fees for not meeting a minimum amount of transactions? On the other hand, do the fees change if the volume changes?

How long is the contract for? Who is actually processing the transaction? What bank backs the processor?

These are all important things to know before selecting your processor.

Equipment Needed

What you need to accept credit card payments will vary on the type of business you have. Do you have a physical location that you open every day? If so, a terminal may be needed.

Or do you take your business on the road and attend shows and pop-ups? If this is your business model, you may need a mobile payment processor. This type allows you to use your phone or tablet as the processor.

Associated Costs

Small businesses are responsible for the fees acquired from credit card processing. Most transactions have a fee of 1% to 3.5%. The fee amount depends on the charged amount, the banking institution, and several other factors.

Some companies have other fees associated with credit card processing. These can include:

  • A startup/setup fee
  • Monthly minimum fees
  • Paper statement fees
  • Early termination fees
  • Interchange fees

It’s important to understand the payment terms and your terms with the processor. Some companies include interchange and monthly fees in the percentage you pay per transaction. Others have it separately.

Research and thoroughly read the terms before selecting who you will use for credit card processing.

Don’t Let Costs Scare You

There are ways to offset the costs of credit card processing. You can include a surcharge for transactions. There are quite a few laws surrounding this, so it’s important you understand them. That way you don’t do something you shouldn’t and cause legal issues down the road.

Pros Of Accepting Credit Cards

There are many pros to accepting credit cards. You’ll probably see a boost in sales because people tend to spend more and make more impulsive decisions when using a credit card. Additionally, you’ll see:

  • More customers and easier payments
  • Faster cash flow
  • Streamlined business operations

There are also zero expense business credit cards for savvy owners and clients you may consider. These are types of credit cards that have no annual fees, or hidden costs and give customers cashback or rewards without extra costs. 

It’ll allow you more efficient purchasing power which you can also accept from your customers. You’ll then be adding to your customer’s convenience and experience encouraging repeat transactions or purchases.

With these advantages, small businesses could see revenue growth.

More Customers And Ease Of Payments

Credit card transactions are easier. You don’t have to worry about depositing funds at the end of the day or always have change on hand to provide customers.

Many customers never carry cash. So, offering credit card payment options will increase your reach with customers.

Faster Cash Flow

You don’t have to worry about the bank processing your deposit. Or wait for a check to clear. With credit card payments, the funds are often available immediately.

It makes tracking payments easier and gives your business more flexibility in its cash flow.

Streamline Business Operations

Many credit card processors have all your transactions in one place. This streamlines your accounting process significantly! You can easily track taxes, income, and expenses with accurate recordkeeping.

Cons Of Accepting Credit Cards

As with anything, there are some cons to accepting credit cards. The obvious one is more costs. You’ll be paying transaction fees and possibly others when you offer this option.

And when doing anything on the internet, there is always the possibility of fraud or a breach of information.

How To Choose A Processor

When you search for a credit card processor, you should learn about the company. What kind of support do they offer? When are they available?

Some processors offer all-in-one solutions to help you manage your payroll and other business functions. When researching companies, it’s a good idea to see if there are ways to save money with existing companies.

While researching companies, there are a few things to consider and keep in mind. You’ll want to understand the payment security process in place and you’ll want to negotiate your contract.

Payment Security

The most important information to find is the security the company offers. Do they offer PCI and EMV compliance? What measures are in place to keep your transactions secure?

Where will your company and customer information be stored? How is it kept secure? Your customers will also be concerned about safety, so knowing this ahead of time can help avoid awkward situations.


After you’ve selected your credit card processor, you should negotiate your contract terms. This can help you to lower fees and get the best option for your business.

Get Started With Card Processing Today

Whether your company takes in-person, mobile, or a combination of both payments, there is a solution out there for your business. Research card processors to find the best option for your business.

Is your small business ready to get started today? Are you interested in transparent pricing, integrations, and custom reporting? Here at Payline, we offer all of these plus next-day funding!

If you want to learn more about our offerings for small business credit card processing, check out our services page.

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