With the rapid changes in the payment ecosystem over the last few years, business owners need to adapt quickly to the new payment systems to provide a seamless service to customers.
Among the various payment methods today, credit card payment has emerged as the most preferred payment option that customers use to shop offline and online.
Once the business owner decides if he wants to use a merchant account, a payment service provider, or an app, he can open a credit card processing account and set up a payment system. Here is how a merchant can accept credit card payments in-store and online.
Steps to Accept In-Store Credit Card Payment
Customers may make in-store credit card payments at a restaurant, in shopping stores, or at other points of sale. To accept credit card payments at physical sale points, a business owner requires the following equipment and services:
- Payment processor: A payment processor is a vendor who processes credit card payment transactions done by a customer. Small business owners can use the services of a payment processor, and large business owners can opt for a merchant account. A merchant account is more suitable for business owners doing a high-risk business or having many transactions daily.
- Point-of-sale system: A point-of-sale system is a combination of hardware and software computing and physical tools that facilitate a payment transaction. A merchant must purchase hardware like mobile card readers, fixed card readers, barcode scanners, etc., and pay a monthly fee for software like sales, inventory, and tax monitors.
- Payment terminals: Payment terminals are devices that process credit card transactions.
Now that you know the services and equipment required to accept credit card payments let us see the steps in the in-store payment process.
Step 1: Determining the payment processing needs: The first step for merchants is to determine payment processing needs. They need to decide if they will accept online, in-store, mobile, etc.; the payment can be one-time, recurring, or subscription-based. It will help the merchants understand the features they need in th
eir payment system.
Step 2: Choosing a payment processor: The merchant’s payment processor must be compatible with other software like the point-of-sale system. It reduces the scope of errors by eliminating the need for manual entries in the payment processor. The merchant’s point-of-sale system may have an in-built payment processor for convenience.
Step 3: Opening a credit card processing account: A small business can choose a credit card processing service which is a payment service provider. However, if the merchant has large-scale operations, he will require a merchant account.
Step 4: Setting up the payment software: After the merchant selects the payment processor and has an active account, he needs to learn to use the software. The software depends on whether the credit card payment processor is integrated into the point-of-sale system or the merchant uses tools provided by the card-providing service.
Step 5: Setting up the hardware: The merchant would require card readers to accept in-store credit card payments. The card readers come in various forms, like a small dongle that the merchant can sync with his smartphone or a complete POS system.
Step 6: Testing the system: Once the set-up is complete, the business owner should test the system before opening it to customers. It ensures smooth processing when the merchant is dealing with customers. To test the system, the merchant can process a small transaction and get his amount refunded.
Steps to Accept Online Credit Card Payment
Financial transactions made over the internet are called online credit card payments. The online credit card payment system functions in a pattern similar to in-store payments. In the online credit card payment system, the payment processor transfers the payment information, and the customer’s credit card company and the bank accept or reject the transaction.
The merchant receives the money in his account within one or two working days in the online payment system. The steps to accept online credit card payments are as follows:
Step 1: Setting up an online store: The merchant must first set up an online store where customers can shop for various products.
Step 2: Setting up a check-out process: Once the merchant has created an online store, he needs to set up a check-out process to make the payment process simple for the customers. For this, the check-out process should be mobile-friendly.
Step 3: Setting up the online payment services: After this, the merchant needs to integrate an online payment processing solution to give more options to the customers to make a payment and speed up the payment process.
The merchants should ensure that the customer data is secure while accepting online and offline payments. By setting up an effective credit card payment system, the merchant can offer better services and a better shopping experience for the customers.