In the near future, there will come a time when businesses can no longer ignore the need to accept card payments. Much of this can be owed to the rising number of shoppers that prefer to make payments using debit and credit cards. In fact, some surveys on shopping trends have predicted that card payments will surpass cash transactions in the not so distant future. When that happens, businesses that only accept cash will start to lose sales to competitors who have embraced cashless payment systems.
For business owners who want to know what it takes to process card payments, this guide will offer some useful insight. There are many cashless epos solutions from which to choose. However, the following are the basic requirements that you will need to start accepting debit and credit card payments.
1. A Merchant Account
Every business that wants to start accepting card payments has to set up a merchant account. This account acts as a holding location for all card payments that a business processes. The service provider offering the merchant account acts as a middleman between the business and customer’s bank or credit card company. Companies that offer these services make all the necessary arrangements to deduct payments from a customer’s credit or debit card and deposits the funds to a business’s merchant account. The funds are transferred to the business owner’s bank account minus service commissions after clearing all processing protocols.
In order to process card payments at a checkout terminal, you will need more than a merchant account. There are several tools needed to bill customers via debit and credit cards. A chip and pin machine is one such tool, which is essentially a smart card reader. You may have seen one of these gadgets at point of sale terminals that accept card payments.
There are basically two types of card readers – contact and contactless. With the former models, there is contact with the chip on the card which has to be inserted in the terminal, while the latter chip and pin devices only require you to swipe a customer’s card, hence the name contactless. Merchant service providers either lease card payment terminals to retailers at low monthly rates or sell the equipment at a onetime fee.
Chip & pin readers require internet connectivity to function. The reason for this is that these terminals have to communicate with the database of the card issuing company or bank. Depending on the manufacturer, these devices can be used in a wired or wireless network. The networking equipment to use will therefore be determined by the type of connectivity options your chip & pin brand supports.
Accepting card payments is not a difficult task. All it takes is a chip & pin machine that is compatible with the POS system in use and a merchant account. Keep in mind, however, that fees for operating merchant accounts and compliance with industry standards vary from one provider to another. Therefore, make sure to do your research before implementing a card payment terminal in your business.