How to Accept Credit Cards

Credit Card Processing

An Overview For Your Business


There’s no shortage of ways to accept credit cards.

From traditional credit card readers to mobile payment devices and payment gateways, the credit card payment industry happily has you covered.

In fact, a lack of options is practically never the problem for businesses that want to process credit cards. The challenge is to figure out which options are both affordable for your business and a good match for your customers’ needs.

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Ways to Accept Credit Cards


In general, the available credit card processing methods simply reflect the differing ways people do business, including in-storemobile, and online credit card payment methods.

We’ll discuss each of these possibilities, including their advantages and disadvantages, in the section below.


In Store Credit Card Payments

If your business operates at a physical location (often called a “brick-and-mortar store”) and only accepts payments directly from customers, at the least you’ll need a way to process in-person credit card payments. This means you’ll need the equipment necessary for swiping, tapping, or chipping your customer’s credit or debit card.

For this purpose, a traditional credit card terminal will likely work for most businesses with physical locations. But you might also explore more advanced point-of-sale (POS) systems that act more like retail management systems—combining transaction capabilities with bookkeeping and other high-level functions.


Traditional Credit Card Terminals


Most businesses that accept in-store credit card payments use a traditional payment terminal. Traditional payment terminals are the familiar little counter-top machines that use a wired internet connection to transmit card and transaction data to the merchant’s payment processor.

  • Advantages of Traditional Payment Terminals
    The advantages of traditional payment terminals include their simplicity and security. They’re easy to use, transmit data more securely than wireless options, and can typically process multiple payment options, including credit cards, debit cards, and gift cards. Taking payments over the phone is also possible—but, especially these days, many customers aren’t willing to give their card information over the phone.Traditional credit card terminals are generally one of the least expensive payment options you’ll find—at least when it comes to the device itself. They’ll typically set you back a few hundred bucks, at the most, and some payment processors will ship you a traditional payment terminal for free when you sign up for their services.
  • Disadvantages of Traditional Payment Terminals
    The disadvantages of traditional credit card terminals center on their immobility. They require a wired connection and a fixed work station. If you need to process payments in more than one location in your store you’ll need to pay more for additional payment terminals. And if your internet connection goes down, your ability to process credit card payments will go down with it.Traditional terminals are the living dinosaurs of the card payment industry, but they are often all a brick-and-mortar store really needs to begin accepting credit card payments. This is particularly true when it comes to small business credit card processing: businesses that handle all transactions in a single place and don’t need (or want) more sophisticated options—small retail stores, doctors offices, and full-service restaurants among them.


Integrated Point-of-Sale (POS) Systems


Point-of-sale (POS) systems can do everything a traditional payment terminal can do and more. POS systems move beyond the basic goal of a traditional payment terminal—processing credit card payments—to include features like barcode scanning, cash-drawer maintenance, employee time-clocks, inventory management, and business analytics.

  • Advantages of Integrated POS Systems
    On the surface, at least, the benefits of an integrated POS system are obvious. You won’t have to deal with a pile of receipts at the end of the day, and you’ll be able to integrate diverse aspects of your business (sales, profits, expenses, employee management, etc.) into a single system.And you’ll have a lot of options for your system’s overall look and feel. Cash drawers, PIN pads, scanners, and customer-facing displays are among the bells and whistles you can expect, depending on your needs and the model you choose, and the hardware will already come equipped with the software you need.
  • Disadvantages of Integrated POS Systems
    But all of these conveniences naturally come with added expenses. A sophisticated POS system can cost hundreds or thousands of dollars, depending on the brand and model, and they often include monthly fees for the use of the system’s software.The real question is whether or not your business really needs all of the cool features that come with a sophisticated POS system. If your operation is small, or you’re just starting out, a traditional payment terminal or a wireless payment option might be the better fit.

Wireless & Mobile Payments

If you do business on the go, however, you’ll need a wireless or mobile credit card payment option. These typically take the form of either a wireless terminal or a mobile card reader plugged into a tablet or smartphone (along with the appropriate app to make it work).

Of course, wireless and mobile payment options are also available for processing in-store payments. “In store,” “wireless,” and “mobile” are not mutually exclusive terms in the world of credit card processing.


Wireless Credit Card Terminals


Probably the simplest way to think about wireless terminals is to treat them as the wireless equivalent of a traditional credit card payment terminal. Wireless credit card terminals perform most of the same functions as traditional terminals, but they connect to your payment processor through a cellular data connection or Wi-Fi.

  • Advantages of Wireless Credit Card Terminals
    Wireless credit card terminals can accept credit cards, debit cards, and gift cards, and they can be used to process manual transactions as well—all the basic functions most businesses need. And they are particularly useful for businesses that need to take orders or accept payments away from a traditional, fixed checkout counter, whether that’s at multiple locations in the store or while you’re out and about making deliveries. When it comes to restaurant credit card processing, for instance, you could have servers take orders and payments at the table instead of a central checkout counter.But wireless credit card terminals can also serve that “fixed counter” requirement, if need be, so they’re just as serviceable for stores that don’t need multiple payment locations. Additionally, more sophisticated wireless terminals—often called “smart terminals”—can perform the higher-level functions typical of an integrated POS system.
  • Disadvantages of Wireless Credit Card Terminals
    You’ll need a good WiFi connection or cellular signal to make a wireless credit card terminal work. The occasional poor signal (something you can’t control) might interrupt processing and disrupt your ability to provide good customer service. Wireless terminals can also be expensive, especially smart terminals, and some “proprietary machines” are set up to work only with a specific payment processor (this can also be an issue with other types of credit card machines, including integrated POS systems). Fortunately, most credit card machines, including most wireless terminals, can be reprogrammed by your new payment processor for an additional fee.


Mobile Credit Card Readers


The terms “wireless credit card terminals” and “mobile card readers” are often used interchangeably, but mobile credit card processing really refers to payment technology that integrates with your existing mobile device (a smartphone or tablet). Paired with a mobile processing app, you’re able to enter card information directly or plug in a device for swiping, tapping, or chipping your customer’s card.

  • Advantages of Mobile Credit Card Readers
    Mobile card readers are all about convenience and ease of use. The additional hardware you’ll need is usually fairly inexpensive, so long as you have a compatible smartphone or tablet, and you can accept payments virtually anywhere where you can get a WiFi signal or cellular connection.Mobile card readers are especially useful for hobbyists, very small businesses, and businesses that operate without a physical location.
  • Disadvantages of Mobile Credit Card Readers
    Mobile credit card readers can suffer from the same connection issues that occasionally beguile wireless credit card terminals, but the most significant disadvantage will be your overall processing costs. Turning your phone or tablet into a credit card machine requires a mobile processing app, and most of the companies that provide them—typically called payment service providers or PSPs—often charge higher credit card processing fees than more traditional merchant service providers. Whether that’s really a disadvantage or not will depend on your average ticket and sales volume. Hobbyists and businesses with low average tickets might actually benefit from the flat rates most PSPs charge for their services, whereas larger businesses might see their processing costs spiral out of control the more money they make.

Online Credit Card Payments

Things are a bit different for online credit card processing. Instead of a credit card terminal, POS system, wireless terminal or mobile card reader—all physical options in a physical setting—you’ll need a way to interact with customers and process credit and debit card payments online.

In general, this requires:

  • a website (an online store),
  • a payment processor, and
  • a payment gateway that sends encrypted data from the website to the payment processor.

These general requirements, however, can be handled in a variety of ways. You can create your own website, for instance, or do business at an E-marketplace (or both), and you’ll have various online payment processing and payment gateway options depending on the processor you choose and the type of experience you want for your online customers at the point-of-sale.


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