There are plenty of different scenarios where you might want to learn more about your options and responsibilities when it comes to accepting credit cards. Maybe you’re a small business who hasn’t accepted cards to this point, but you’re ready. Maybe you’re an online entrepreneur, and you’re setting up a new e-Commerce business, as another example.
Whatever the reasons, there are some important things you should know before your business starts accepting credit card transactions.
One specific area of focus you should ensure you’re well aware of is PCI compliance. Payment Card Industry Data Security Standard or PCI DSS means that you’re following certain guidelines for merchants who accept card payments. To not be compliant can mean significant financial penalties passed on to you from the bank you work with.
Within the larger topic of PCI compliance, there are more specific requirements to be aware of.
For example, network segmentation. “Network segmentation acts as the starting point for determining the scope of your Payment Card Industry Data Security Standard (PCI DSS) compliance journey,” writes Karen Walsh of Reciprocity.
There’s a lot to know when it comes to issues of PCI compliance and it gets fairly complex. Sometimes the best option for smaller businesses is to use compliance software to make it all more manageable.
Be aware of what processing fees are going to be before you make a commitment. If you’re selling low-cost items, are the processing fees even going to make sense?
There are different ways processing fees might be charged. For example, they might be charged as an annual fee, or maybe you have to pay a startup fee. Maybe you pay more for having paper account statements versus online statements. Then, there are the actual transaction fees, which are usually a percentage of each transaction or the total transactions.
You can shop around when it comes to fees and find the best deal, but you likely want something simple and intended for small businesses and startups. As you grow you might scale up, but start as cheaply and simply as possible at first.
What’s Needed to Facilitate Card Payments
Exactly what you’ll need to facilitate card payments can depend a lot on whether you’re accepting them in a brick-and-mortar store, online or a combination. If you’re brick-and-mortar you’re going to need some kind of equipment to process cards, such as Point-of-Sale equipment.
Some small businesses accepting in-person card payments are able to just use a mobile card reader.
If you’re an online business, you don’t need physical equipment, but you will need to setup up a system that can accept cards, and then you’ll pay what’s called a gateway fee.
Finally, be aware of the differences between a merchant service account and a business bank account. Your merchant service account is connected to a variety of issuing banks and card processes, as well as your business bank account. Your merchant service account is somewhat of a go-between for cards and your business bank account.