5 Things Every Business Should Know Before Accepting Payments

If you’re planning to start a business, or have recently started one, you may be under the impression that accepting payments is a simple matter. Once upon a time, a vendor or service provider would simply exchange goods or services for coin or equally valued item–money and barter systems. Simple.Well, since most of us don’t even carry cash anymore and the barter system is long since dead, business owners have ventured into a whole new world of payment and credit card processing—and to be successful, it’s vital to know what to expect.

Here are 5 important concepts to implement or consider before accepting payments.

More options mean fewer excuses

The fact is: the more forms of payment you accept, the fewer excuses a customer will have to not purchase what you’re selling. Think of how many times you have been caught in a cash only situation–when you had no cash. Of course, you simply can’t purchase the item. Done.

You don’t want to find yourself losing a sale simply because you didn’t offer debit or credit card processing, especially when there is so much technology available to make credit card processing an easy reality for your business.

Don’t be afraid of technology

While incorporating technology into your business structure can seem daunting at first, especially if your business is more established and has established ways of operation, you will lose out on potential sales and satisfied returning customers if you don’t get with the times.

Besides, there are so many new, technologies that are very easy and affordable to implement: mobile credit card readers that attach to tablets or phones, iPad POS systems to integrate and report sales information, internet-based payment processing and online purchase options for your website that will increase sales across a wider customer base. Why ignore all these amazing technological tools when they could make your business stronger?

Do your research

While upgrading your methods of accepting payments is smart in the long run, you do have to be aware of the costs and misconceptions involved in debit and credit card processing. First, you have to understand the differences in the fees:

•    Monthly fee: a regular fee to use the service, if a processor is not charging a monthly fee, processing rates will be much higher.
•    Transaction fee: flat or percentage rate, charged with each transaction
•    Interchange fee: bank-charged percentage of the transaction, which goes to the card’s issuing bank for expenses

One misconception to note: Many business owners believe American Express is a very expensive type of card to process, but it’s not – it’s on par with Visa/MasterCard. Additionally, customers paying with an AmEx card tend to purchase more than a customer paying with Visa or MasterCard.

Find the best merchant card processor for you

Now for the more complicated part of debit or credit card processing: you’ll have to enlist the help of a credit card processor.

But no worries–you have options. In this case, you will be the customer, and you will be the one bringing business to them. They’re going to want to provide you with competitive rates, but only if you know your options and do your research well enough to be competent in general service rates and fees. It’s also important to note that the bank is not always the best option. There are plenty of third party merchant card processors that can get you better rates than going directly through your bank.

But here’s the catch, it’s not just about the rates. Sure one company may give you great rates, with minimal fees but are you getting your money on time (or at all)? Can you call and get a hold of a knowledgeable customer service representative if there is a crisis? Will the company help you through the process of becoming PCI compliant (necessary to process credit cards)? Will this company keep your sensitive business information secure? Does the processor allow your business the ability to accept credit cards via mobile devices or online? These are all important factors to consider outside of just getting a good rate.

Case Study: How Partnering With NTC Texas Changed a Business

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Set strict payment rules and guidelines

Finally, communicating with your customers about payment expectations is essential. Some businesses will offer products that require payment arrangements, payment plans and scheduled payment terms. If your business is one of these, select a strict set of guidelines and expectations and make sure your customer is aware, both verbally and in writing, of these expectations.

Be creative about it, too. Offer incentives for early payoff or discounts for meeting regular payment schedules—anything to ensure that your customers want to pay their bills on time.

The moral of the story: be knowledgeable about your options and the costs you might accrue to upgrade your payment processing system. But with more options for your customers and increased technological support, you can ensure your business will be strong and successful.

If you are already processing credit cards, contact NTC Texas for a free rate review – our specialists will help you to understand your existing statements and how your rate and fee structures can be improved. No obligations!