Accept card payments and grow your business

As the economy continues to evolve, more and more consumers are relying on credit and debit cards as their primary mode of payment and in a lot of cases, are not using cash as a payment method anymore. For businesses, accepting these payment methods can be highly beneficial, as studies have shown that companies that accept credit and debit cards tend to make more money than those that do not.

This is mainly because customers who pay with these methods tend to spend more money than those who use cash or checks. Additionally, accepting credit and debit cards can help businesses attract more customers, as many consumers prefer the convenience and security of using these payment methods.

Below are two key reasons with regards to why your business needs to start accepting credit card payments;

1. Convenience for customers: As cashless transactions increase and become more popular, many customers prefer to pay with cards or phones rather than cash. Accepting card payments lets you meet customers’ needs and enhance their shopping experience. Transactions can be completed quickly with card payments, improving business efficiency and the customer experience.
2. Increase in Sales: Studies have shown that customers are more likely to make impulsive purchases when they can pay by card and spend more using a card instead of cash. Additionally, if your business is online, accepting card payments opens your business to customers worldwide, giving you the potential for significant growth.

How to accept card payments

To accept card payments for your business, follow these steps:

1. Choose a payment processor that matches your business needs.
2. In the case of online payments, select a payment gateway to facilitate transactions.
3. Decide on the hardware you’ll need for physical stores, like a POS system or a more modern card payment acceptance solution such as a card machine.
4. Set up a merchant account if required by your payment processor.
5. Integrate the payment system with your business operations.

Facilitating in-person card payments has become increasingly convenient and accessible for ambitious entrepreneurs seeking to expand their businesses. Gone are the days when business owners were burdened with cumbersome contractual obligations and fixed monthly expenditures, adding to the already existing transaction fees. The daunting barriers associated with accepting card payments deterred many from pursuing this avenue, deeming it an arduous and costly endeavor. However, in the present era, things have changed significantly.

Within the United Kingdom, card payments encompass both debit and credit cards, and myPOS’ cutting-edge payment devices empower entrepreneurs to effortlessly accommodate both payment types. Recent data from UK Finance reveals that, in 2020, debit cards accounted for a significant 44% of all payments made in the country, while credit card usage experienced an 18% decline. This notable shift in the consumer behavior can be attributed to individuals prioritizing the repayment of debts and utilizing their available funds instead of undertaking financial risks during the challenging period of the pandemic.

What happens when you take card payments?

When a card payment is made, a series of steps occur behind the scenes to validate and complete the transaction.

1. Card Details Entered: The customer either swipes or inserts their card into the reader or enters their details manually if the transaction occurs online. This process allows the card reader to read the necessary information stored on the card’s magnetic strip or chip, or inputted manually, which is then used to initiate the transaction with the payment processor and ultimately authorize the payment.
2. Transaction Authorization: The Point of Sale (POS) system or card machine proceeds to transmit the transaction specifics to the customer’s issuing bank to secure payment authorization. If the payment is over a certain amount, the payment terminal may require the 4-digit code to be entered into the system.
3. Transaction Approval or Denial: When a transaction is made, the issuing bank reviews the details, such as the validity of the card and the customer’s available funds or credit. Based on this information, the bank decides whether to approve or deny the transaction.
4. Response Relayed: The approval or denial message is returned to the payment processor, which then sends it to the payment terminal or online checkout system. If approved, the transaction proceeds and a receipt is issued. The customer’s bank will hold the transaction funds.

Different ways to accept card payments

As businesses adapt to evolving customer payment preferences, it’s essential to understand the various methods available for accepting card payments. From in-store transactions to remote operations, different solutions cater to distinct needs.

• Card Machines: These devices are commonly found in physical stores and are used to facilitate payments. They enable customers to pay by inserting or swiping their card and entering their PIN or through contactless options like NFC (Near Field Communication). The transaction is completed with a simple tap on their card or mobile device.
• Online Payment Gateways: Online businesses use eCommerce services to process card payments securely. These services utilize encryption to protect sensitive information, like credit card numbers, during transactions between customers and merchants and between merchants and payment processors.
• Virtual Terminals: Web-based systems allow businesses to input credit or debit card information into their computer manually. This makes it convenient for phone or mail-order transactions without a physical card. It transforms your computer into a credit card terminal, similar to an online card machine.

How secure are card payments?

Card payments are of utmost importance, and this is why advanced technologies and strict regulations are in place to safeguard the process against fraudulent activities. Consumers and businesses can have peace of mind knowing that these measures are in place to protect financial transactions.

Advanced technology ensures payment information is encrypted, and that any attempt to tamper with the data is immediately detected and dealt with. These measures help to build trust in the payment system, and encourage more people to use it, which ultimately benefits everyone involved.

Here are some critical factors that contribute to card payment security:

1. Encryption: Highly secure encryption technology transforms confidential cardholder data into incomprehensible code while conducting card transactions. This state-of-the-art measure guarantees that sensitive information is safeguarded against unauthorized access while being transmitted between the involved parties.
2. Authentication Protocols: When making purchases in person, customers may be required to input a Personal Identification Number (PIN) or sign their name.
3. EMV Chips: EMV chip-enabled cards, developed by Europay, Mastercard, and Visa, are considered more secure than magnetic stripe cards. These chips generate one-of-a-kind transaction codes that are not reusable, thereby minimizing the possibility of counterfeit card fraud.
4. Near Field Communication (NFC): When making contactless payments through NFC, you can be assured of security as encryption and tokenization are utilized. Additionally, device-based authentication, such as fingerprint or device passcode, is often required.

What are the costs of accepting credit card payments?

As a business, it’s crucial to have a thorough understanding of all the costs involved in accepting credit card payments, from the terminal to the online costs of running the system. This knowledge will help you efficiently manage your finances and negotiate favourable terms with your payment processor. While there may be initial expenses when acquiring a card machine, it can ultimately bring about a profitable return on investment in the future.

• Hardware Costs: Hardware is necessary to accept credit card payments, which includes items like credit card terminals, point-of-sale (POS) systems, or mobile card readers. The cost of this hardware can vary depending on the features and technology you require. While primary card terminals may cost as little as 100GBP, advanced POS systems could run into the thousands. Some payment processors may offer hardware for rent, lowering your upfront costs but increasing your overall long-term expenditure. It is worth evaluating all the options to see what your business requires.
• Monthly Fees: Many payment processors charge monthly fees for their services, especially if they offer value-added features like detailed analytics, inventory management, or customer relationship management (CRM) tools. These fees can range from 10GBP to 100GBP per month, based on the selected provider and package. It’s imperative to understand what you’re getting for this fee and whether it offers value to your business.
• Transaction Fees: Furthermore, payment processors charge a fee for every credit card transaction. This is typically a percentage of the transaction amount, often around 1-3%, sometimes with a fixed per-transaction fee added on. The exact rate can vary based on factors like your business’ industry, sales volume, and the type of cards you accept. Some processors offer lower rates for companies with higher sales volumes, so it’s worth shopping around to find the best deal.

Remember, all these costs should be considered when pricing your products or services. While they can add up, accepting credit cards can also increase your sales volume, making it a worthwhile investment.

Take card payments effortlessly, whether in-store or on-the-go

In conclusion, accepting card payments is no longer a choice, but is a necessity for businesses of all sizes aiming to stay relevant and competitive in today’s digitized, convenience-focused consumer market. The growth of card usage underscores the need for businesses to incorporate these payment methods into their operations.

The process of accepting card payments can be seamlessly integrated into your business, whether you operate in a brick-and-mortar setting or the digital realm. Various tools like card machines, online payment gateways, and virtual terminals cater to the diverse needs of businesses. It’s essential to select a reliable and secure payment processor like myPOS, which prioritizes the security of transactions, offers fair pricing, and provides great customer service.

The world is moving towards digital and contactless payments. By adapting and accepting card payments, businesses can ensure they’re caught up and ready for the future, enhancing customer experiences and promoting business growth in the process. With myPOS, taking card payments becomes effortless, letting you focus on what truly matters – driving your business forward.

Learn more about card payments and card machines

• What are PDQ machines?
• Card reader: what is it and how does it work?
• Why is contactless not working?
• Everything about credit card processing
• How does a Chip and PIN machine work?