It’s no secret that cash is on the decline and credit card processing is more important than ever.
Fewer people than ever have large amounts of cash on hand. And this was before the onset of the COVID-19 pandemic, which has made people even more reticent to handle cash.
This is why it’s so important for small businesses to offer credit card processing to their customers. But finding the right payment processors and avoiding unnecessary fees isn’t easy.
Don’t worry-we’ve got you covered. Here are some helpful tips so you can start processing credit card payments as soon as possible.
1. Find a Credit Card Processing Company
The first tip is to do your homework.
Before making any decisions about which credit card processing companies to choose, you need to do quite a bit of research. The most important criterion is to find a payment processor that’s a good fit for your business.
Among the factors you’ll need to consider is whether the processor offers full-service or aggregated accounts. Many payment processors fall into two categories when it comes to the services they offer.
The first category covers processors that offer full-service merchant accounts. The second involves those who offer aggregated accounts. Examples of the latter include payment service providers like PayPal or Square.
There are pros and cons to each of these categories. For instance, a payment service provider has a lower barrier to entry. Approval is often fast and easy, and credit card processing fees are low. On the other hand, there are many drawbacks. These include few options for customer support and the recurrent possibility that your account could be frozen or eliminated altogether.
A full-service merchant account is much more stable. The processing rates are typically lower, but there are more obstacles to entry. Getting approved for an account is contingent on more underwriting. You’ll also have to look out for certain drawbacks, including long-term contracts and penalties for early cancellation.
2. Negotiate Your Contract with your credit card processor
Now it’s time to get down to business.
After studying your options for small business credit card processing, you should select a few candidates. Go ahead and contact them for a quote. Don’t forget to inquire about all fee types, including transaction and incidental fees, which can quickly eat into your profit margins.
Price comparisons can be difficult with credit card processing. Many payment processors offer different services and have varying pricing models.
But there are a few important things to look out for in a contract. You’ll want to ensure that you can terminate it at any time. After all, mistakes can happen, and the last thing you want is to be saddled with a bad processor.
Of course, not every fee is under the payment processor’s control. But many additional fees and markups are, and with a little negotiation, these can be lowered to something more reasonable.
Credit card processing companies offer different kinds of rate plans, and these can be more or less transparent about assessed fees. A subscription-type pricing plan is very open about a processor’s markup. Tiered and flat-rate pricing plans, on the other hand, are not.
So the important thing is to understand the pricing plan and fee schedule before agreeing to any contract with a payment processor.
3. Follow the Contractual Terms
Once you’ve negotiated a credit card processing contract, you’re ready to take your business to a new level.
One of the most important tips we can offer is to follow your contractual terms to the letter. This is necessary to ensure your business’ reputation and avoid any disputes with your payment processor.
Take the time to read through all the rules, regulations, and stipulations that come with your new contract. This is a good idea for many reasons, including the basic one of knowing how to use your new payment system properly.
It also helps you establish which kinds of transactions you’re allowed to accept. Some processors, for instance, will allow you to process payments without the need of a physical debit chip or credit card. This is crucial for over-the-phone or online payments, but many processors require extra information and additional systems for these transactions.
4. Decide How to Handle Refunds
Dealing with returns and refunds is a critical part of the credit card processing business.
And let’s face it, small businesses need to have a refund policy as a part of their overall customer service strategy. Even the most conscientious business can expect a dissatisfied customer from time to time, which is why a contingency plan for handling product and money returns is so important.
Credit card processors offer different ways to refund money, and you should make these terms and methods clear to the customer before a purchase is made. Put your refund policy in writing, and have it clearly displayed at sale terminals and purchase desks so there’s no confusion.
5. Know How to Identify Fraud
These days, you can’t afford to overlook credit card fraud and identity theft. These crimes come with the territory, so you should have a policy in place to identify them and minimize their effects.
You can’t be expected to catch all instances of identity theft. But one thing you can do is identify fraudulent activities, such as suspicious chargebacks. A good payment processor will have programs to help you detect and handle fraud, and they’ll also have checks in place on their end to prevent identity theft.
6. Advertise Your System
Now that you’ve chosen a processing company and established your new payment system, it’s time to shout that fact from the rafters.
New and returning customers may not be aware of what kind of transactions your business accepts. So don’t be shy. Once you’ve set up a new credit card processor, it’s important to advertise that fact.
The best method is often the simplest. We’ve all seen the American Express and Visa decals that many merchants display prominently on the windows of their establishments. This is perfect for advertising to your customers that you accept many different payment methods.
Credit Card Processing Tips for Your Small Business
If your small business doesn’t offer credit card processing, then you’re at a severe disadvantage. The decline of cash and ongoing pandemic fears are just a few of the reasons why finding a payment processor is so important.
So go ahead and contact Payline today. We offer flexible and affordable payment solutions for businesses both large and small.