How Do I Accept Credit Card Payments Online?

Credit Card & Laptop – Photo by rupixen.com on Unsplash

Your business is becoming a reality. Your website is coming to life. Now, for the next step, how can your customers pay you?

As a result of Covid-19, cash is being used less and less these days. Some businesses have made the total switch and ditched the cash drawer completely. They now ONLY accept credit card payments at their establishments.

Merchant Processing is the way credit card payments are transferred from a customer to a business bank account. Over the past decade, several companies have entered the marketplace, making it easier for new entrepreneurs to process credit card payments.

What are the differences between the big, traditional merchant processors and the newer, more nimble, mobile apps? The main difference is the ease of entry and convenience.

As you probably know, convenience comes with a higher cost. Think about the typical convenience store. Many of the products available for purchase can be bought for a much better price at a grocery store, but if you want it NOW, you’re going to pay the higher price.

There’s a similar scenario in the merchant processing world. There are more hoops to jump through in obtaining a traditional merchant account, but in the long run, you will pay lower fees, especially when processing higher credit card volumes.

If you’re in a rush and need to process credit cards now, you can download one of the apps, or utilize the “free” option in your accounting software. You’ll be able to accept credit cards immediately, but at a higher merchant processing fee.

If you’re just starting out in business and don’t expect to process more than $1,000 per month, a traditional merchant processing account might NOT be worth the expense, because there are usually flat monthly fees involved.

Once your business grows and you’re accepting OVER $4,000 of credit card sales per month, this price point is usually when a traditional merchant service account becomes the better value.

The apps come with no monthly fees or contracts, but once you’re processing several thousand dollars of credit card sales, the higher processing fees, usually ranging from 2.7% to 3.5%, tend to outpace the traditional merchant accounts, even when you factor in their monthly fees.

Here is a list of the most popular processing apps:

I will provide a rate comparison in a future blog post so you can decide what is best for you and your new business.

If you decide to explore your rates with a traditional merchant processor, I’m happy to give you a quote through our house Merchant Services Broker, VCCP.

Good luck and start bringing in those sales!

Get started with Step 1!

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