Debit and credit card transactions have become commonplace in today’s market. Customers are increasingly using these cards to buy products and services. A Federal Reserve study found that credit and debit cards constituted 59 per cent of non-cash payments in 2012, with consumers making $73.2 billion transactions over the course of the year. Foregoing these payment methods can alienate and inconvenience customers, costing your business thousands of dollars. As a result, accepting credit and debit cards can help grow your company and expose new audiences to your products.
With this in mind, it’s important to understand what payment processing practices will help your enterprise succeed. We’ve outlined a few steps you can take to make sure you work with the best possible processor.
Open a Merchant Account
Before you can grow your business and start processing credit and debit card payments, you will need a place to store the revenue that these transactions generate. Merchant accounts allow you to collect these funds and shift them to your company’s accounts. Financial institutions generally accept merchant account applications that include a cover letter, detailed financial documents, processing statements that detail transactions, refunds, and chargebacks over the past three months. Once you have set up your merchant account, you can apply to a payment processor that will allow you to accept credit and debit transactions.
Apply to the Right Payment Processor
With myriad payment processors competing for your business, each are sure to offer unique fees and processing options and terms to cater to different types of industries. As a result, you will need to shop around and find the option that fits your company’s needs best. When considering a processor, get them to break down all the fees your prospective account would accrue. Make sure the processor’s monthly statements are clear so you don’t end up paying needless charges. The right processor should have strong security and anti-fraud measures in place to protect your company. You will also want to work with a company that offers 24/7 support so you can fix any unforeseen errors that may arise. Finally, review your proposed merchant agreement to fully understand the paperwork and procedures your processor will expect you to fulfill.
Choose a Processing Option
There is no one-size-fits-all payment processing option. You will have to choose a method that will best accommodate the way your company does business. These differ depending on the processor with which you work, but generally, you should consider the types of credit and debit card transactions your customers will make when they shop at your business. If you’re an e-commerce company, for example, mobile and/or online payment processing will obviously suit your customers, as opposed to point-of-sale options that work better in brick-and-mortar enterprises. With some processors, you can also establish recurring payments that will allow you to collect payment on a designated schedule, which is ideal for companies that hope to offer monthly or annual billing.
Ensure Service Provider Complies with Appropriate Standards
Like other companies, payment processors must abide by industry standards and best practices. These rules dictate how organizations handle everything from information security to the proper function of their equipment. When considering a payment processing company, you will need to establish that their services meet PCI and/or EMV standards. The Payment Card Industry Data Security Standard (PCI DSS) helps prevent credit card fraud and the compromise of customer data. It ensures that processors are responsible for finding vulnerabilities in their information technology and fixing them before customer data can be compromised. EMV standards, meanwhile, address everything from chips, personalization, and more. These measures allow cards and transaction equipment to work with one another, in addition to preventing data fraud. Processors that operate according to these standards should offer responsible services, allowing you to grow your business.