Accepting card payments forms a major part in a company’s growth because there is a growing demand by customers to be able to pay using their Debit or Credit Card instead of using cash. When a company realizes that they need a Credit Card Machine for this purpose, they will begin to research and find out that there are in fact various different types of machines and ways available to allow a company to accept card payments.
Processing Terms To Know
If you’re new to accepting credit cards, here are some key industry terms:
A Merchant Account is an account that lets you accept and process credit card payments and get paid by the credit card companies. You can get a merchant account from your bank, from an all-in-one payment service like Square, or through independent payment processors like Payline.
These are fees that your Merchant Account Provider charges for their services. Generally, these fees are a percentage of each transaction plus a per-transaction fee for certain types of charges.
Point of Sale (POS) System
POS systems handle payments for in-store sales and generally include a payment screen, credit card reader, receipt printer, and cash drawer. Many POS systems, like Square POS, include features like inventory and sales reporting to help you manage your business.
How to Accept Credit Cards In-Store
It’s important to first understand that accepting credit cards in person differs from accepting credit cards online. Here are the three things you need to know:
- In-person (in-store and mobile) credit card payments require card reading equipment that allows you to physically swipe a card.
- Online (ecommerce and virtual terminal) credit card payments use a payment gateway that lets customers or sales staff enter credit card information into a secure online form.
- The credit card processing fees for in-person sales are lower than online sales since in-person sales carry a far lower risk of fraud.
How to Accept Credit Cards for In-Store Sales
You Will Need:
- Credit Card Reader or a POS System
- Merchant Account with a retail merchant services account or all-in-one provider like Square
How it Works:
To accept credit cards in an in-store retail setting, a credit card reader lets customers physically swipe, insert (for chip cards), or tap (for eWallets like Apple Pay) credit cards to complete their payment. Your card reader is connected to the internet directly or through your POS system, like the one pictured above.
After swiping, inserting, or tapping the card, the payment information is transmitted for approval via your merchant account. Within a moment, you receive confirmation that the transaction was approved or declined. If approved, you complete the sale and your merchant account provider deposits the funds into your account, generally within 1-2 days.
In-store sales generally have the lowest processing fees since you are face-to-face with your buyer, able to confirm their identity, and physically process the card. Here, the risk of fraud is relatively low.