Simple Credit Card Processing Solutions
Posted on January 25, 2013
It is easy for a business owner to get overwhelmed by all the information that’s available regarding credit card processing providers. The merchant services market arguably has more middlemen than any other industry in America. But it is important to keep in mind that business owners don’t necessarily need to learn everything there is to know about credit card processing. Like many other things in business (and in life), the secret to choosing a merchant services provider is to keep it simple. Many companies have become successful with the help of one of many simple credit card processing solutions.
First, it is essential to have a basic understanding of the types of credit card processing systems that are available. The most widely-known setup usually involves one or more retail swipe terminals. These devices provide a method for cashiers or customers to physically swipe a credit card through a machine that authenticates the transaction. Wireless processors are similar to retail swipe terminals, but can be used in conjunction with a laptop or cell phone or as a stand-alone portable device. Such a system allows transactions to be authenticated at locations other than a company’s home office.
Touch tone technology can be used either in or out of a company’s office. This technology allows credit cards to be processed over any touch tone telephone or cell phone. Some companies may prefer to utilize point of sale software, which can be integrated with most computer systems or networks. POS software allows the business to manually enter credit card information and receive acceptance notification via a phone line and modem. Real-time processing can be thought of as highly-advanced POS software. This method is web-based and processes transactions via a secure Internet connection in just seconds. Finally, there are also numerous third-party processors in the marketplace. This option is best suited for businesses that want another entity to handle all of their credit card processing needs.
None of these solutions is inherently superior, but some are better suited for certain types of businesses than others. As an example, traditional retail businesses should probably go with the retail swipe terminal option. For small shops or low-traffic retailers, one or two swipe terminals may suffice. But for larger stores with higher customer volume (like grocers, drugstores, or restaurants), several different swipe terminals may be preferable.
Many companies need to process credit card payments at locations other than their base of operation. These entities should strongly consider investing in a wireless processing system. This way, landscapers, home repairmen, and other service providers can complete credit card transactions on site without having to relay or transport information back to company headquarters. This system also works well for companies with mobile salespeople who need to process customer payments immediately after closing a sale.
For smaller businesses or sole proprietors who sell their products in temporary storefronts (such as craft fair vendors) or even from their vehicles (such as door-to-door salespeople), touch tone technology might be a perfect fit. This setup offers many of the benefits of wireless processing without the overhead costs of portable swipe terminals or similar electronic accessories. Touch tone technology could also be suitable for mobile service providers, as well as seasonal businesses (snow shovelers, surfboard rental establishments, etc.) which may not need to process several credit card transactions at once.
Real-time processing systems go hand-in-hand with Internet-based businesses. Many providers of real-time processing can easily integrate their products with common “shopping cart” type systems that web-based businesses prefer to use. Often, web hosting companies can also offer real-time processing as part of a bundle of services to customers who want to sell their products over the Web.
Point of sale software can also be used by Internet-based entities with lower volumes than web “stores.” But companies that receive customer orders via telephone, fax, mail, or email may be better suited for POS software. These types of companies may not need the sophistication of real-time processing, and may also benefit from some of the bookkeeping applications that come with many POS software programs.
Finally, third-party processors can be the perfect solution for companies that do not want to deal with credit card processing at all. This option may also be attractive for businesses that are not based in the United States and may have trouble securing one of the abovementioned credit card processing services. But this method comes with a tradeoff; usually, third-party processors take a percentage of product sales as payment of their services, rather than charging per transaction like other types of credit card processing providers.
It is vital to understand the needs of a given business before selecting a credit card processing solution. Going through this simple vetting process can save business owners a lot of time and money which could be wasted by choosing the wrong type of merchant services provider.
Written By: Chris Martin
Chris Martin is a freelance writer who offers information for businesses about credit card processing.