What’s the Best Way to Accept Credit Cards If You’re a Small Business?
By Jasmine Glasheen
Your small business needs to accept credit cards. After all, 75.7 percent of customers have at least one credit card and over 6/10 of Americans believe that we will soon be a completely cashless society.
Despite the necessity of accepting credit cards at your small business, it can be challenging to determine which credit card processing methods to adopt. There are multiple factors to consider in your decision-making process including:
- the number of customers you serve on a daily basis
- the cost of adopting each payment method
- what you will be charged per transaction
- which demographic your core customer base falls into.
The question is, then, how your small business can accept credit cards in the most efficient and cost-effective ways possible. Let’s delve into the pros and cons of the most widely-used credit card payment technologies, so you can determine the best method for your business’ unique needs.
Payment Processors & Technologies
There are plenty of great options to consider when it comes to payment processing. But for the purpose of this article, we are going to focus on growing payment methods that are becoming more popular among modern consumers.
EMV is an acronym for chip-and-pin payments and, in the scheme of things, U.S. retailers have been late adopters of EMV technology. EMV payments are more secure than traditional swipe-and-sign methods.
Since U.S. retailers are expected to shoulder the financial burden of EMV adoption, only 68 percent of U.S. retailers have adopted the technology. However, EMV will soon be the only acceptable method of physical card processing, so it’s better to invest in EMV from the offset than to have to update your SMB’s credit card processing technology down the line.
Best for: The EMV verification method is best for any merchant using a countertop credit card machine. Whether you’re running a brick-and-mortar retail store, restaurant, or medical office, EMV verification will work for you.
For a long time, Visa has been the only option contactless payments, but now Mastercard and American Express are getting in on the action. Contactless cards can help you save time at your cash wrap, but since they’re even newer than EMV, few retailers have invested in the technology to make contactless payments possible.
Contactless payments also depend on your customer having a smartphone as well as having downloaded their payment information to a contactless platform, so there will be customers who aren’t able to use this payment method at all.
Best for: Just like with EMV, contactless payments can work for a wide range of merchants, from retailers and restaurants to service providers and medical professional. The main factor to consider is your target market.
According to Statista, Millennials (ages 25-34) are the top age group adopting contactless payments, with 57% of consumers using the method to pay for purchases. We can expect this growth to continue, though, particularly as Generation Z comes of age.
It’s also worth keeping contactless payments in your radar, as industry data shows a steady upward trend of contactless payment market revenue in the U.S. Statista projects market revenue to grow from $63 billion in 2019 to $148 billion in 2022, and $358 billion in 2025.
Mobile POS stations are on the rise; the number of mobile POS systems in retail is expected to triple by 2023. As retailers continue to adopt mobile swipe stations, they are becoming more affordable and convenient to implement.
From swipeable card readers that you can attach to your phone, to mobile tablets that connect to your in-store POS system, there is a mobile payment platform for every business size and budget.
However, cyber-security and fraud are major challenges in the mobile payments arena today and implementing mobile swipe in your store may necessitate investing in additional security methods to protect customer data.
Best for: Mobile payments are ideal for merchants who are constantly on the go. If you’re running a mobile business like a food truck or if you offer services that require you to make house calls, then mobile payments offer a convenient way to take credit cards on the spot.
Secure online processing
Since the advent of e-commerce, online payment processing has become one of the primary ways to accept credit cards for small businesses. All online payments aren’t created equally, however, and you can help reduce cart abandonment by reducing friction points in the payments process – such as long page load times, not taking certain credit cards, or tacking on large shipping fees at checkout.
Customers also need to know that their credit card information is secure, and you can give them this peace of mind by partnering with a PCI compliant online payment processor.
Best for: This payment method is an ideal solution for merchants who sell products or services over the web. Secure online processing is also a great option if you need to accept credit cards over the phone.
This is NOT a good solution for businesses that deal with face-to-face credit card payments. Secure online processing requires you to manually key in transactions, so the process takes a lot longer. If you’re looking to take credit cards in person, then you’re better off with EMV, contactless, or mobile.
Tip: Consider payment integrations
To provide a consistent experience and to prevent letting valuable data waste away in silos, your payment processing platform needs to be able to communicate with your website host, POS system, accounting, and inventory management technology –– that means it needs to be compatible with the solutions you use for other aspects of your business.
Whichever method you decide to use for credit card processing, see to it that your payment system can “talk” to the other software and platforms that you’re using your biz. This ensures that data — such as sales, payment amounts, and payment types — are synced across your systems, which in turn leads to increased efficiency, fewer human errors and better reporting.
Be sure to talk to your merchant services provider and ask them about the solutions that they integrate with. That way, you can set up your payment systems correctly and start processing cards with ease.
As we discussed earlier, there are multiple factors to consider when deciding which ways to accept credit cards in your small business. In the end, you should always strive to integrate the payment methods that make your customer’s shopping journey as seamless as possible.
Partnering with a payment processor such as Payment Depot will allow your small business to securely accept your customer’s credit card payments –– whether they prefer contactless payments, mobile swipe, online shopping, or traditional POS.