Small Business Guide To Credit Card Processing

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Almost every person today makes a purchase using their credit card, no matter what the product or service is. Regardless of the type of credit card used, every business now should be well acquainted with credit card processing, especially how it works and the processing fees involved. 

In fact, there are lots of things to consider when it comes to accepting a credit card payment and it applies for any type of business such as: 

• Mom and pop shops 
• Sole proprietors
• Online stores and ecommerce site 
• Brick and mortar stores 
• Small home-based sellers 

Credit card processing as it is may not seem too complicated but the factors to consider and the road to follow to accepting a credit card payment is not easy. There are things like: 

• Getting sanctioned for a merchant account able to accept credit payments

• Using the most appropriate credit card processing technology as a big corporation

• Keeping up with and complying the security protocols and requirements for credit card acceptance that seem to be ever changing (example: EMV chips) 

All these can be time consuming or confusing in their own right and when combined, the hurdles may seem insurmountable to you. 

Knowledge About The Technical Terms

Most businesses, especially the small ones, often do not know about the lingo of credit card processing and acceptance and feel like as if they are at a loss due to this disadvantage. This is why knowing the technical terms and buzzwords is the first of the few very important things that any business should know about credit card processing and acceptance. This will help them to stay ahead. 

Learning the new vocabulary about accepting credit cards will help you to understand: 

• The credit card processing process 
• How the money moves through the system 
• Who moves the money through the system 

Ideally, most of the small businesses are bootstrapped and that is the primary reason they overlook the importance of such details in the credit card industry jargon. Instead they put in all the effort and focus into getting the setup of their credit card processor system right. 

Nonetheless, knowledge of such technical terms will save you and your business from a headache if any problems arise in the future. Well, at least you should have some idea about these buzzwords as it will help you to know a great deal about what actually goes on behind the scenes when it comes to credit card processing. 

Helpful Technical Terminology

The terms used in credit card industry will also allow you to know about the key players in credit card processing. These are terms and buzzwords are as follows: 

The Merchant Banks

This is ideally a financial institution that will provide you with merchant account services. They will also facilitate the transactions to different bank accounts. However, merchant banks should not be mixed up with aggregators as they play different roles in credit card processing services. Sometimes, aggregator companies such as PayPal and Payoneer may create merchant accounts and even process credit card dealings but they are surely not any financial institutions and certainly not banks.  

The Processor Company

This is the typical 3rd party middleman. A processor actually takes on the responsibilities of the merchant bank and facilitate in credit card transactions. It routes all credit card info to the appropriate credit card payment networks and the related merchant accounts.  

The Issuing Banks

This is once again a financial institution but their responsibilities are restricted primarily for issuing credit cards to the different consumers. 

Lastly, you should already be aware of the different card payment brands such as Visa, MasterCard, Discover and American Express. 

Finding the right credit card processor You should never consider that your options for credit card processing are limited simply because you may be an owner of a very small business. Irrespective of the type of your business, how you operate and where you plan to conduct your operation, you will need to have every aspect and process of credit card processing streamlined. 

It's absolutely critical to find the right credit card processor for this matter. They are the only ones who can make your business operation and transactions a lot easier. A couple of examples will make it easier for you to understand the need of a good processor. 

- If you have a mobile business and spend most of your time attending trade shows and want to have a lot of flexibility in accepting a credit card payment anywhere, you should select a mobile credit card processor as your best choice. 

- On the other hand, if you are an owner of an ecommerce store, you should consider selecting a shared commerce POS or Point Of Sale system. This will help you to integrate all your credit card dealings with your accounting and your CRM or Customer Relationship Management software. This will in turn consolidate all your offline and online sales data automatically. 

Make sure that you choose the credit card processor for your business wisely and after conducting a proper research on and interviewing a variety of vendors. 

Revenues Requirement 

Lastly, it is the revenue requirements that you should care for. It may seem to be a no-brainer to you as it is obviously the primary focus of all businesses. However, it is the revenue requirements of the different credit card companies that is referred here. 

The fact that you will find many different credit card processing options available can appear to be a significant drawback, especially when you are a very small business. This is – you may find it very difficult to meet the different requirements of different vendors. This can pose a significant challenge especially if your business is unable to generate adequate revenue because the credit card processing companies may simply reject your application just for this specific reason. 

Such revenue requirements vary from one credit card processor to another widely and it is not wise to believe that every one of them will expect a least amount of transaction of $10,000 in revenue a month. 

Therefore, while selecting a credit card processor, research to meet with such strict revenue requirements. You will find a few processors that typically cater to small businesses with customized solutions for credit card processing.

Savvy SMB Credit Card Processing Power

When your company is small and you are living the lean startup life, it's always important to look into all aspects of your payment systems and overall frugal finances. Keep these tips in mind when you consider your credit card processing programs in the future.

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