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How to accept credit card payments

Learning how to accept credit card payments can seem complicated, but it can be crucial for small businesses. Click through to learn the basics.

5 min read

Knowing how to accept credit card payments is absolutely crucial for any up-and-coming business. While some sectors still use significant amounts of cash, it’s very rare to find a successful business that doesn’t accept credit cards at all. 

In this article, we’ll take you through everything you need to know to accept credit card payments. Whether you’re accepting payments online or in person, this guide will get you up and running. 

Why is it important to accept credit card payments?

Increase your sales

The most obvious reason to learn how to accept credit card payments is to boost your sales. This happens in two ways.

First, you expand your pool of potential customers, as you won’t have to turn customers away if they want to pay by card. 

Second, there is evidence that customers spend more when they’re using a card

Provide flexible payment options

Even those who can pay by other means might get annoyed if they have to do so. It might sound like a small thing, but customers can resent having to use a payment method other than the one they had in mind. 

This is especially true for more expensive purchases, where customers might have arranged their budgeting around a specific payment method. 

Most people really value being able to choose how they pay. Enabling them to do so will improve their experience and, hopefully, build loyalty, encouraging them to return to you in the future.

Save time

From a purely practical standpoint, increasing the variety of payment methods your business can accept will save you valuable time. The best online payment apps make transfers quick and easy, and credit card processors will usually deposit the money into your account automatically, so you won’t have to take a trip to the bank to deposit cash or a cheque. 

Be ready for growth

With so many things for small businesses to keep up with, find out how QuickBooks can help you run your finances.

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How will you accept credit card payments?

So you have good reasons to learn how to accept credit card payments. But how should you do it?

We can divide credit card payments into two main categories: online and in-person payments

You’ll sometimes see mobile payments listed as a separate type. In practice, though, they fit into one of these two categories, as they occur either online or in person. 

While you can, of course, maximise your potential sales by accepting both types of payment, you should consider what’s right for your business before you move forwards. 

A physical shop would benefit from accepting in-person payments, for instance, but this might not make so much sense for a self-employed freelancer who mostly works online. 

Setting up a merchant account

If you want to accept card payments through your business, you’ll need to set up a merchant account. A merchant account is simply a holding account where payments will be kept while the transaction is processed. 

Other features of merchant accounts include: 

  • providing a unique merchant ID for your business 

  • working directly with card networks, issuers and processors 

When you take a card payment, the money your customer sends is deposited in your merchant account, which then pays it into your business account – usually within a few working days.

Merchant accounts, merchant service providers and payment systems

The phrase ‘merchant account’ is sometimes used interchangeably with ‘merchant service provider’ (MSP). MSP is just a name for the full payment system, which takes care of handling and processing the card payment. 

How to pick a merchant account

Again, different payment systems will be appropriate for different businesses. Make sure you do your research and consider exactly what you want to get out of your merchant account. 

You should also consider the following factors: 

  • what types of payment the provider can process

  • what fees they charge the business owner 

  • which additional services they offer, if any 

  • what sort of fraud protection the account provides 

It’s worth looking through your different options carefully, and you should pay close attention to the different payment structures that the various providers offer. If you don’t take card payments very often, for instance, a per-transaction fee model might work out better than a monthly or yearly one. 

How to accept credit card payments online

If you plan to take online card payments, you’ll need to choose a provider that can let you do so. 

Online payment systems are usually made up of a processor, which handles the actual transaction and passes the money on to your merchant bank account, and a gateway, which sends the customer’s money to the processor in the first place . 

Again, do your research and consider exactly what you need before you make any decisions. Shop around and compare different providers’ offerings to find the best deal. 

How to accept in-person card payments 

For in-person payments, you’ll need a point of sale (POS) system, which includes both the hardware to read cards and the software to take payments. 

Once your system is set up, the process of accepting payment is simple. 

  1. The customer inserts, swipes or taps their card. 

  2. The system performs a quick check to see whether the transaction has been approved or declined. 

  3. If it’s been approved, your merchant account will receive the funds and transfer them to your business account. 

For in-person mobile payments, the process is the same. The only difference is that you’ll need to get a mobile reader to accept the initial payment. 

Accept card payments with QuickBooks

One final thing you should consider when setting up your card payments is how well you can integrate those payments with your existing accounting systems. 

QuickBooks works well with many well-known processing systems. It lets you save a lot of time on admin by linking your accounts, invoices and payments. 

In addition, QuickBooks customers get special discounts on online systems like PayPal and can get in-person equipment from Zettle for a reduced price. 

We hope you’ve found this guide on how to accept credit card payments helpful. While the details are complicated, the overall process is quite simple for a business owner: once you’ve chosen a merchant service provider, they’ll handle all the messy details. 

It’s crucial that you pick the right provider for you, though. You should start by considering precisely what you need from a credit card payment processor. It can be especially helpful to make a list, as this will allow you to narrow your search for the perfect provider. 

Once you’ve done that, you’ll be taking card payments online, in person or both in no time – and your customers will hopefully reward you for letting them pay the way they want to.