How to Accept Credit Card Payments

In today's rapidly evolving business environment, where cashless payments are quickly gaining prominence, the ability to easily accept credit card payments has become integral to running a successful merchant operation.

According to Finder.com, an independent research and comparison platform for financial institutions and service providers, the number of credit card accounts (564 million) in the United States is at an all-time high, and 40 percent of consumers are more likely to use a card when making a purchase.

Whether you're running a brick-and-mortar store or an online business, embracing plastic is not merely a convenience but a necessity.

Understanding Credit Card Payments

As technology has rapidly changed, so has the way in which consumer credit card data is captured. When someone completes a purchase with their card, whether in-store, online, or by phone, information is entered by swiping a magnetic stripe, tapping the EMV chip, or manually entering the information through a secure reader or virtual terminal. On an online platform, the cardholder enters details on a secure form.

The data is then encrypted and transmitted via a connection to the processing network, with point-to-point encryption (P2PE), ensuring data security and PCI compliance. Within seconds in most cases, the issuer reviews the transaction based on validity, amount, and available funds, and decides whether or not to authorize the transaction.

If approved, both the processor and merchant receive an authorization response, allowing the merchant to complete the transaction by providing the customer with a receipt or preparing to ship ordered items for online sales.

What was once offered as a convenience to customers, credit cards have become the primary source of payment for most businesses—from local convenience stores and Big Box retailers to online stores. At the end of the day, it's about creating a seamless and trustworthy experience for your customers. Merchants who embrace card acceptance can boost their sales, enhance their reputation and expand their customer reach.

How to Begin Accepting Credit Card Transactions

Work With a Processing Partner

Traditionally, businesses had to open a specialized bank account that holds funds during and after credit card transactions, also known as a “merchant account,” to facilitate these payments. This process involves collaborating with merchant services providers or banks and acquiring the hardware or software required for processing independently, which can be expensive and time-consuming.

The better option is to work with an all-in-one payment service and technology provider such as OnCore Payment Technologies, to streamline the entire process and reduce expenses.

It’s important to choose a processing partner that aligns with your specific business needs and projected growth. It also helps to consider the volume your business expects to process and whether the provider integrates smoothly with your website or point-of-sale (POS) systems.

Find the Most Cost-Effective Pricing Model

It's important to compare processing fees, which can vary depending on transaction types and networks. The most common pricing models include:

• Subscription-Based

  This typically involves a base monthly charge, as well as an interchange and per transaction fee, and is often advantageous for businesses with high transaction volumes.

• Interchange-Plus

  With this model, merchants are charged per credit or debit card purchase. These fees include the interchange rate, which is charged by the credit card issuer.

• Flat-Rate

  With flat-rate processing, fees are fixed and often exceed the interchange rate. However, because this model doesn’t involve any recurring charges, this is often a preferred method of processing for seasonal businesses or those with low transaction volumes.

Set Up Your Merchant Account & Payment Systems

You’ll need to make a merchant account with your processor, which generally involves providing information about your business and connecting your company bank account.

After that, all that’s left is setting up your POS systems, terminals, or secure gateways depending on how you plan to process payments.

There are three main options for accepting card payments, each with its own technology requirements and associated fees.

• In-Person

  This method is well-suited for brick-and-mortar retailers, on-site service providers, and mobile businesses. It usually involves the customer physically presenting their card, which lowers the risk of fraud. Consequently, in-person transactions typically come with lower fees. To process in-person, businesses need a card reader or point-of-sale (POS) system.

• Online

  E-commerce stores, restaurants accepting online orders, and digital service providers often rely on online transactions, but they typically carry higher processing fees compared to in-person. To accept online credit card payments, businesses require a digital storefront like an e-commerce website and a secure gateway.

• Over-the-Phone

  These card-not-present transactions are commonly used for subscription services, restaurants for takeout orders, and products or services that require more sales assistance. Since the cardholder isn’t physically present, these pose a higher risk of fraud, resulting in the highest processing fees compared to other transactions. For this, businesses need a credit card reader and a POS system or an online gateway.

By navigating these steps and understanding the nuances of each method, businesses can successfully implement credit card acceptance, catering to diverse customer preferences and expanding their options.

If you’re ready to take your business to the next level, work with OnCore. Whether you're a small startup or an established industry leader, OnCore’s comprehensive solutions cater to merchants of all sizes and across a diverse range of industries.

Our commitment to delivering cutting-edge solutions, seamless integrations, enhanced security, and personalized support ensures that your business thrives.

Join OnCore today to start elevating your payment processing and drive your business toward greater success!