For small business owners in search of a way to process credit card payments, there are many choices and the amount of information can feel overwhelming. To find the best credit card processor for your business, start by considering these five points.
The first step in comparing credit card processors is to know exactly which features you need. Do you operate a brick-and-mortar that needs its own countertop POS system? Are you an e-commerce operation seeking the ability to let clients pay for goods and services exclusively through your website? Or are you running a business out of your home and plan to only take credit card info by phone? Explore every potential business transaction and determine how you’d like to be paid for the work you’re doing.
Each form of payment comes with its own associated fees, and there are pros and cons associated with each. Think not only about the differeing costs you’ll pay to process a Visa®, Mastercard®, or American Express® transaction, or a personal credit card versus a business card, but also about information security and customer convenience.
If you only need to be able to take credit card payments by phone, setting up most processors is relatively easy. Once you’re signed up, getting started usually takes little more than a short phone call and establishing login credentials for your online portal (usually called a payment gateway). If you have an online storefront, this adds the step of connecting the payment gateway to your site so customers can enter their credit card information at checkout. To process payments in person, you’ll need a card reader, and depending on the type of business you run, you may also require an entire countertop POS system.
Credit card processing comes with various fees depending on the service you select, and this may be one of the more challenging comparison aspects to navigate. The most significant expense will come in the form of interchange reimbursement fees, which are paid per transaction to card-issuing banks/credit card associations. These fees are typically structured as a percentage of each transaction plus a flat fee.
If you run a physical store, you’ll need to lease or buy a terminal and you’ll also be expected to pay a terminal fee each time a card is swiped. For online stores, terminal fees are replaced with payment gateway fees. With many providers, you can also expect to pay some combination of a monthly or annual fee, statement or report fees, and incidental fees (such as for added security measures, like address verification). Some credit card processors also include early-termination fees or monthly minimums that you’ll want to be aware of before committing.
For pop-up businesses or companies without a dedicated storefront, on-the-go technology such as mobile chip readers offered by many providers might be your best bet. This type of technology allows you to process transactions directly from a phone or tablet; it may offer a better alternative to a merchant system depending on your business needs. These technology providers often charge a percentage fee for every transaction, so if you anticipate handling a high dollar value of charges, this payment model may wind up being a bit more expensive than traditional merchant accounts.
We are committed to helping your business succeed. Our dedicated business banking professionals can help you find the right product to match your business’ needs. To learn more about Citizens Bank Merchant Services, please call 1-800-428-7463, visit us online, or visit your nearest Citizens Bank Branch.
Disclaimer: Views expressed may not necessarily reflect those of Citizens Bank. The information contained herein is for informational purposes only as a service to the public, and is not legal advice or a substitute for legal counsel, nor does it constitute advertising or a solicitation. You should do your own research and/or contact your own legal or tax advisor for assistance with questions you may have on the information contained herein.
Mastercard® is a registered trademark of Mastercard International Incorporated. American Express® is a registered trademark of American Express Company.