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Credit cards are one of the world’s most popular payment methods. In a recent report, the Federal Reserve found that 82% of the adults surveyed had a credit card. Integrating credit card payments into your business can improve long-term success. Whether you want to learn how to accept credit card payments online or install a point-of-sale (POS) system in your brick-and-mortar store, it’s important to know what credit card payments are and how they work.
Accepting credit card payments is a way for businesses to offer convenience and security to customers. This simple adjustment can increase sales, build trust, and expand your business to a global audience. Here’s everything business owners need to know.
Credit cards allow a customer to borrow funds from a card issuer to make a purchase with the agreement that they’ll repay the borrowed amount with interest. A credit card payment is the electronic transaction by which that purchase is made.
Credit cards offer customers a cashless way to make a payment. By expanding your business to accept credit cards, you provide more payment possibilities for your customers. Accepting credit cards can lead to more sales and better customer satisfaction.
Keep in mind that accepting credit cards as payment often comes with fees. Credit card processing fees are an additional percentage that the business or customer must pay for payment processing. Transaction fees are flat fees that may be added to the processing fee. The terms and fees will differ depending on your agreement.
FAQ: What are the advantages of accepting credit card payments from customers?
Businesses that accept credit card payments often benefit from more sales and profits. The convenience of credit cards also can boost customer satisfaction and loyalty over time. Other advantages include faster transactions, better security, and access to a global customer base.
Accepting credit card payments is a straightforward process that can help you increase sales rapidly. You’ll need to work with payment service providers to get started.
To accept credit cards as payments as a business, you must apply for a merchant account — a type of business bank account that lets you receive credit card funds and acts as a bridge between businesses and payment processors. Whether you apply to merchant service providers or banks, they’ll check areas related to your business finances, transaction history, and creditworthiness. Once the provider of your choice approves your account, you can move on to the next step.
Next, you’ll need to determine which type of payment method best suits your business. If you run a brick-and-mortar store, you must install a POS system with terminals or card readers to make credit card transactions.
If you’re wondering how to accept credit card payments on your phone, you’ll want to look into mobile payment processing. Mobile payments work well for any sales inside or outside a store where the customer has a physical card. Setting up mobile payment processing can be as simple as installing an app and hooking a card reader attachment to your phone or mobile device.
For online stores, you may need to integrate a payment processor to accept online payments. Many website builders like Shopify and Squarespace already have payment gateways built in. Otherwise, you’ll need to create an account and connect with a merchant service provider, such as Stripe or PayPal. Some service providers also allow for the addition of virtual terminals, where orders can be processed manually.
After you’ve decided which payment methods will benefit your business, you can integrate them into your business operations. Integrating a credit card payment processing system requires you to sync various aspects of your business, like its transactions, customer data, and inventory. Once set up, you can begin accepting customer credit card payments.
FAQ: How do I allow customers to pay by credit card?
To allow customers to use credit cards for their transactions, you must choose a payment processing company that suits your business needs and set up a merchant account. Once approved, determine which of in-store, online, and mobile payments you want to accept. Finally, integrate your payment system into your business operations.
Technological advances continue to reshape the payment processing landscape, making it even more important to stay informed about the newest trends. Innovations like contactless payments and digital wallets make paying for products and services more convenient and safer. Here are some future trends to pay attention to.
Digital wallets don’t just make it easier than ever to make fast credit card payments or peer-to-peer transactions — they also allow for purchases and transfers with cryptocurrency. More and more businesses worldwide are accepting popular cryptocurrencies like Bitcoin and Ethereum.
Along with the rise in digital payments, there has been an increase in payment security. Physical credit cards and credit card numbers pose risks. Thieves who get their hands on these can make purchases with a tap, swipe, PIN, or forged signature. However, digital payments offer much more security.
Digital transactions are encrypted, meaning the data changes into a random code that criminals cannot understand. Tokenization transforms information like a credit card number into a unique token with no value outside the transaction. Other modern security protocols — like two-factor authentication, which requires passwords; biometric data, which may use a fingerprint or face scan; or other forms of authentication — further protect your customers’ funds and financial data.
Offering more payment options to customers will only improve your chances of making a sale. Tailoring your business to accept credit cards can give it a significant boost in sales and customer experience. Using an effective bank or financial institution like Fidelity Bank can make setting up your system to accept credit cards a breeze.
At Fidelity Bank, we help sellers set up payment systems that accept credit card payments. Whether your business is a brick-and-mortar or online store, we have the tools to help you get started and support your business as it expands.
To get the most out of your business and allow customers to use credit cards for purchases, schedule a meeting with one of our agents and see what Fidelity Bank can do for you.
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