Does your small business accept credit cards? Some business owners may shy away from accepting them because of the fees but today more than ever it’s a good idea to accept as many forms of payment from clients as possible. And luckily there are several options to choose from when deciding to accept credit cards. Online processing organizations such as Square and Pay Pal are entry-level solutions while larger organizations such as First Data and Heartland provide more robust solutions for more frequent or larger transactions.
Launch Workplaces recently hosted an educational event for our members featuring guest speaker Mitchell Reisberg from Heartland Payment Systems who recommended that small businesses might want to accept credit cards if customers are requesting it; when the Accounts Receivable balance becomes too large; if clients’ checks repeatedly bounce; or if cash flow is an issue. “Most people pay you faster if they can use a credit card because of the award points they can earn,” he explained.
Of course, there are fees and conditions involved when accepting credit cards so you need to look closely at the term’s payment processing companies are offering. Square, for example, charges 2.75% per transaction and PayPal charges 2.9%. These organizations can hold your money for up to 6 months for various reasons, including if they think a charge could be fraudulent, so be aware. Mr. Reisberg advises that you ask these questions when comparing payment processing companies:
- Is there a contract involved?
- Is there a cancellation fee?
- What is the pricing program? Interchange Plus pricing is the best for business owners as it’s the most transparent. You can find out the current interchange rate for Visa and MasterCard on their websites.
- Are there annual fees?
- Are there monthly fees?
- What equipment are they providing you? Are there fees for it? How easy is it to make a change?
Once you start accepting cards, you have to be certain that your internal processes are Payment Card Industry (PCI) compliant. This is where a lot of businesses get in trouble. Cardholder data must be secured every step of the way from the moment the card number is taken to storing it for future use. Here are some security tips from PCI Data Security Standards:
- Buy and use only approved PIN entry devices at your point-of-sale.
- Buy and use only validated payment software at your POS or website shopping cart.
- Do not store any sensitive cardholder data in computers or on paper.
- Use a firewall on your network and PCs.
- Make sure your wireless router is password-protected and uses encryption.
- Use strong passwords. Be sure to change default passwords on hardware and software – most are unsafe.
- Regularly check PIN entry devices and PCs to make sure no one has installed rogue software or “skimming” devices.
- Teach your employees about security and protecting cardholder data.
- Follow the PCI Data Security Standard. Visit https://www.pcisecuritystandards.org/ for a complete description of current standards.
Armed with this knowledge, accepting credit cards doesn’t have to be scary or difficult for small business owners. Just imagine if Adam Sandler’s character in The Wedding Singer movie had a Square – he could have been actually paid for his singing lessons with American dollars instead of with meatballs!