Guide to Online Credit Card Processing for Small Business

When's the last time you used cash? If you're like most people -- it's been months (or even years). Today's commerce doesn't require you to carry the green, especially since plastic is widely accepted.

The average person owns three credit cards, and 67% of Americans have at least one. But it's not just credit card usage that's increasing -- we're also seeing a rise in mobile payments.

Roughly 40% of people use their phones to make purchases at check out. So if you're not already set up to process online credit card payments, then it's time you do.

Let's take a closer look at what online credit card processing for small business is all about.

What is Online Credit Card Processing for Small Business?

Credit card processing is nothing new -- but processing credit cards virtually using an all-in-one payment processor is. It's the latest trend that's enhancing the convenience of shopping with local and digital stores. And it also allows business owners to take full control of their business finances.

These tools enable you to schedule appointments, message customers via text or email, and manage your online reviews. But let's not get ahead of ourselves.

Online credit card processing for small business consists of affordable tools used for completing transactions digitally. For example, if you offer commercial cleaning services, then you can accept credit card payments on the spot without any equipment.

All you need is a platform, such as contactless payment. Your customers can visit your online store and make the purchase with Apple Pay and Google Pay (or their credit card numbers).

It's a secure way to streamline your payments in a way that makes your customers comfortable.

Payment Service Provider vs. Merchant Accounts

There are two types of online credit card processing for small business. You can use payment service providers (PSP) or merchant accounts.

In the past, merchant accounts were the norm. These are similar to bank accounts - you had to open one for your small business to process credit card payments.

This required a contract, as well as mobile card readers, and e-commerce payment setup (which connects to your bank account). The downside includes undesirable fees for the setup, software or equipment.

And many weren't forthcoming about this until your first billing statement arrived.

PSP is the alternative to merchant accounts.

The difference is these are all-in-one payment systems. What this means is that they:

• Accept credit card payments anywhere (without equipment)
• Accept online and eWallet payments (i.e., Apple Pay)
• Quickly transfer funds into your bank account
• Track inventory
• Manage employees
• Book appointments (and receive payments for them)

And the fees are open and reasonable.

Payment Terms You Should Know

As you begin shopping around and using tools for online credit card processing for small business, you'll run into unfamiliar terms.

Here's a look at the most common:

• Assessment Fees: Charges paid to card associates (Mastercard, Visa, etc.) for credit/debit transactions.
• Card present (CP) transactions: Transactions where the customer swipes the card.
• Card not present (NCP) transactions: Transactions where the customer makes a purchase using the card or account number (not the physical plastic card).
• Digital wallet: System that stores sensitive payment data, such as credit/debit card numbers, expiration date, etc. The customer can then pay without inserting these details. Apple Pay and Google Pay are great examples.
• Mobile point of sale (mPOS): A mobile device that acts as a payment terminal, such as a tablet or smartphone. These typically have a dongle attached for swiping cards.
• Payment gateway: A hosted software that connects the acquirer's bank platform and the merchant.
• Acquirer: The financial institution responsible for processing debit/credit card payments for merchants. Usually, a credit union or bank. It allows merchants to accept credit card payments from banks that issue cards, such as MasterCard and American Express.

How the Credit Card Payment Process Works

The process is simple when you're using the right tools for online credit card processing for small business.

It empowers small businesses to accept payments from anywhere, without the need for a dongle or other physical terminals. You can either manually insert the customer's payment details into the platform.

Or they can do it on their own from their end.

The process is straightforward -- the only thing now is to find an affordable payment processor.

Credit Card Processing Fees to Watch for

Online credit card processing for small business doesn't have to be expensive. If you find the right processor, then you won't run into hidden fees that can hike up your costs.

Here's a look at some of the fees to look for to ensure this doesn't happen to you:

• Transaction fees
• Interchange processing fees
• Interchange plus pricing
• Flat rate fee (i.e., 2.95% + $0.30)
• Miscellaneous fees (service charge fees, statement fees, customer support, PCI compliance etc.)

It's normally the miscellaneous fees that get small business owners, so read the fine print!

What About PCI Compliance & Other Security Factors

The Payment Card Industry (PCI) industry was created to protect online transactions from cybercriminals. It helps to guard merchants and consumers against fraud and secures payment data.

This developed into what's now known as the Data Security Standard (DSS), which is universally accepted.

On that note, you'll need to find a payment service that uses industry best practices and is PCI validated. This way, you're using an online credit card processing for small business that's secure.

Get Started with Online Credit Card Processing for Small Business

You don't have to be a large company to process online payments. And you don't have to spend a lot of money to manage these transactions.

With tools like GoSite Payments, you can get your merchant account set up quickly. Plus, you get to avoid hidden fees.

If you're ready to learn how to get started with online credit card processing for small business, then download our free fact sheet today!