These days, if you were to look inside the wallet of any given Canadian, you would most likely see one or more credit cards. According to the 2019 Canadian Payment Methods and Trends (CPMT) Report, credit cards are among the most used forms of payments across the nation.
In fact, Canadians are the second-highest users of credit cards in the world, just after South Korea. With this in mind, it’s easy to see how accepting card payments will hold your business in good stead.
Find out how to accept credit card payments with various methods below.
Why Accept Credit Card Payments?
Canada has a very high credit card issuance rate, meaning nearly nine out of ten Canadians possess one. Many of these Canadians will use their credit cards to pay for over 50%of their monthly bills and payments. With so many people using credit cards, you appeal to a wide-ranging customer base while providing a sought after service when you accept and receive these payment types.
What Are Credit Card Transaction Fees?
To receive a credit card payment at your business, you will need to understand what credit card fees in Canada are attached to payment processing. Meaning, every time a customer pays you with a credit card, your business will be charged a transaction fee to process these electronic payments and receive the money in your business account for your goods or services.
As they are called, these pre-transaction fees or merchant fees will vary depending on the service provider you use to accept payments. Typically, merchants will pay fees from 0.5% to 5% of the total transaction per customer. Additionally, certain fixed fees will also need to be paid periodically, whether monthly or yearly.
Further processing fees could apply when dealing with chargebacks on a card. This is when a customer purchases something from your store and then seeks to return it, having the original charge rescinded on their card. Learn more about payment processing for chargebacks.
Online Credit Card Payments
Online payment portals offer customers a quick and convenient way to pay for a service or product through the internet. Your business will first need to create or possess a website to accept credit cards online. Take the first steps to building a website, then learn how to create a digital strategy and design a small business website.
Once you have your company’s website up and running, you’ll need to consider how your customers can pay for your goods and services, and how to process their credit card payments. Your business will need to sign up for a payment gateway service to process card payments online.
This gateway service will allow you to accept credit cards, but will also charge you the merchant transaction fees discussed earlier in this article.
E-Commerce Platforms and Credit Cards
E-commerce platforms are the perfect tool for businesses to use alongside their payment gateways. These platforms allow merchants to organize their sales data and inventory all in one place.
Using a platform that integrates with your payment systems can help you keep track of the various payment methods your customers have used for reporting purposes, and what they bought to update your inventory status.
How to take credit card payments over the phone
If offering credit card payments online is not an option, you can also take payments over the phone. Suppose your customers are interested in purchasing something from your store but cannot access it through the internet. In that case, you can manually enter in their credit card information in your payment system over the phone from your business location.
In-person Credit Card Payments
For those customers shopping in-person at your physical business location, you will need to have the proper POS system in place to accept and charge credit cards. This point of sales system is the tool used to process your customers’ payments. A cash register or card payment machine or card reader is used to complete a transaction.
If you are preparing to offer credit card payments in-store, you should also consider software that allows for contactless card payments. Contactless payment options for in-person transactions are on the rise. According to a recent Payment Canada study, due to the COVID pandemic, contactless card payments have become the go-to payment method for people who still shop in stores, with 42%of Canadians avoiding shops that do not accept contactless payment.
Mobile Credit Card Payments
Mobile credit card apps and readers allow merchants and businesses to receive payment through an added device on their smartphone. Newer technology allows tiny card readers to automatically connect with your smartphone or tablet for sleek and useful in-house card reading. You’ll need to research the various mobile apps available before opting to buy the smartphone add-on device and subscription service for processing payments.
The most used mobile app services for accepting and processing credit card payments include:
- Apple Pay
- Google Pay
- Samsung Pay
Some of these apps are better suited for the customers paying in-store versus requesting payment by the merchant. Learn more about the top payment apps used in Canada today.
How Long Does it Take for Credit Card Payments to Go Through?
From the time the merchant accepts payment, to the processing and allocation of funds into the merchant’s bank account, the typical waiting period is 1 to 3 business days. Depending on the processing service your business uses, most credit card payments will reach your business account after twenty-four hours.
Benefits of Accepting Credit Card Payments
As credit cards are one of the most common forms of payment these days, your business will want to provide services that account for this popular transaction method. Customers will appreciate the convenience and efficiency that quick card payments provide, and you’ll be able to complete transactions faster and serve more customers at a time.
On top of the convenience and ease of use, allowing customers to pay with a credit card could mean you see a higher sales rate for your store. Customers won’t be limited by the cash in their wallet, and could therefore be willing to shell out a bit more for your products.
Now more than ever before, Canada has seen an increase in not only credit card usage, but also contactless card usage due to the ongoing Pandemic. Your small business should consider accepting credit card payments, especially with contactless capabilities, to stay competitive in the market today and provide the people with what they want.
Use QuickBooks Online for Payments
QuickBooks Online credit card payment option also provides small businesses with an easy and accessible way to accept card payments. If your business already uses this software for accounting and bookkeeping purposes, then it’s a great way to receive credit card payments too.
Allow customers to pay with cards through electronic invoicing, or connect mobile payment apps to QuickBooks Online to enjoy seamless integration. Make your life easier and provide your customers with quick and easy checkout services with the various payment capabilities of QuickBooks. Try it free today.