Credit card processing for small businesses guide
28 October
Credit card processing for small businesses is a crucial step to ensure transactions are completed without any issues.
For SMEs, it ensures a steady stream of income from customers who are easily able to complete their transactions.
Having an all-in-one system in place means you can quickly and securely process customers’ payments. This keeps your business competitive and sets you up to manage payments in the long-term.
So, in this guide we’ll take you through how the technology works for your business and how to integrate it into your website.
What are credit card processing services?
A credit card processing company is an intermediary directly between you (the merchant) and your customers’ credit card supplier.
The processor allows your online business (or physical store) to accept and process credit/debit card payments.
What are the steps of credit card processing?
Although the technology behind the scenes is complex, ultimately it works to ensure paying by card is easy for your customers. As well as straightforward to manage for your business.
It’s possible to break down the process into eight steps. We’ll do that now so you have a better understanding of how the technology works.
- A purchase is made by a customer. They use a credit card to make the payment using a payment gateway.
- The payment details are entered into a virtual terminal and the cardholder enters their payment details on the hosted website.
- After encrypting the credit card data, this is sent for approval as the payment gateway connects with the processing network.
- After receiving the data, the credit card issuer approves or declines the transaction. It basis this decision on whether the card is valid, the amount of the transaction, and if the customer has the funds to pay for the transaction.
- If the transaction is cleared, the processor and merchant both receive notifications.
- To start completing the transaction, the merchants issues a receipt to the customer.
- The merchant then finalizes everything with a batch closure. The acquiring bank of the processor then takes the funds from the credit card issuer.
- The funds are then deposited into the merchant business account.
It can take up to 48 hours for the merchant to receive the funds.
This may sound odd, but it’s to ensure a thorough and secure process is followed that protects your business’ interests. Along with those of your customers.
What is the best way to take credit card payments for a small business?
The best way for modern businesses to accept credit card payments is by using a merchant gateway. There are many of these to choose from, but FasterPay is an example.
Ultimately, the “best” way to take payments is the method that works best for your business. So, consider what your business needs to make sure customers can pay.
And in most instances, the best approach you can take is to use a credit card processor. This ensures you can quickly and securely process transactions.
All while offering the best security measures for your business and its customers. It’s also a cost-effective method to use—you can find out why below.
What is the cheapest way to process credit cards?
The cheapest way to accept credit card payments is to sign up for a credit card processing service.
This is cost-effective over the long-term and will also increase your payment acceptance rates. That’s because customers find this online payment method one of the best and easiest to use.
So, to keep your costs down you should:
- Use a merchant service provider instead of a bank.
- Take advantage of their payment gateway.
- Integrate your payments.
- Choose a flat rate pricing plan.
- Research your options to choose the best fee rates.
There’s a fixed fee with these charges, that’s how card processing companies make their money from customers.
But this works out well for SMEs on a long-term basis. It’s cost-effective and keeps your business competitive, ensuring you keep customers happy.
So the ROI on having a payment processor is a very good investment.
What is the average fee for credit card processing?
In most instances, credit card processing fees are between 1.3% and 3.5%.
There’s also the charge of the payment processor. How much that is comes down to the business and how much they charge.
How can I avoid credit card processing fees?
Unfortunately, you can’t outright avoid them. However, there are steps you can take to keep the costs down.
- Try to negotiate with the processor to bring the fees down.
- Use an address verification service to reduce the risk of facing credit card fraud.
- Ensure your account is properly set up to reduce risks of higher fees.
Just by using a credit card processor you’re dealing with experts, which means you’ll face the best service and low charges to begin with.
FasterPay’s cost-effective payment solution
If you’re an SME on the lookout for the payment processor to keep your business competitive, then we offer a
FasterPay is an excellent option if you’re looking for merchant account credit card processing.
You can easily integrate our payment platform into your website.
Whether you have coding experience or not, it’s simply to setup and provide your business with:
- Generated pay buttons you copy and paste into your site.
- Multi-currency global payment processing.
- A seamless checkout page to take care of your customer’s transactions.
- Recurring billing with our subscriptions.
- Plugins like WHMCS, Shopify, Magento, and WooCommerce.
- FasterPay Android SDK to make app payments easier.
- Seamless and secure payment processing.
- Maximized revenue and lower churn rates.
We have a full FasterPay for business guide for everything else you need to know about how we support SMEs across the world.
How do credit card processing companies make money?
A credit card processing company makes its money by charging fees for certain tasks.
Every time a customer completes a transaction with you, they take a percentage of that.
This is usually between 1% and 3% of the transaction amount.
What is the role of Visa in credit card processing?
Visa’s role in online credit card processing is to provide the infrastructure to support financial organizations who issue and process credit and debit cards.
However, Visa doesn’t issue plastic, set any fees, or set interest rates. Issuing members have the option to set those fees.
The scale of Visa allows it to operate in this way. It processes over 100 billion transactions a year with a volume nearing US$7 trillion.
Can small businesses charge for card payments?
It depends where you are in the world, but this is often banned. In the UK, for example, crest and debit card surcharges were banned in January 2018.
In many nations the legislation means customers can’t be charged more when they choose to pay by card.
But it’s a good idea to check your local laws so you’re aware of whether you can charge customers or not.
But it isn’t a good idea anyway, as customers can be put off from using your service if you charge them.
What is a POS system?
A POS system lets your business accept payments from customers. It also tracks your sales.
Traditionally, it was a cash register. But in the digital age, these are now pieces of software that check out your customers wherever they may be in the world.
If you have a device like a tablet or smartphone, you just need a POS app and you’re all set. This is how it works:
- A customer decides to buy something from your website.
- The POS system calculates the cost.
- The customer pages.
- The transaction is finalized.
What to consider when choosing a POS system generally includes the price you’ll need to pay, whether the service has a good reputation, and if it’ll do the job for you!
Every business is different and you’ll have specific needs to meet.
But there are some services that deliver everything you need in one package. And we’re one example of how to grow your brand with an all-in-one platform.
Use FasterPay as your payment provider
Sign up with FasterPay to sort out your credit card processing needs.
To take advantage of FasterPay’s merchant services, all you need to do is create a free FasterPay business account now and get started.
We also have a free app that’s available here:
And if you need any help, we have a 24/7 customer support team waiting to answer any questions: support@fasterpay.com.
