A how-to guide for small business credit card processing

How to set up credit card processing for a small business

Let’s define what a credit card processing system is first.

A business payment processor is a third party system that enables you to process customer transactions, transferring the money from their bank account into yours. These processors are able to authorise transactions and they are sometimes referred to as ‘payment gateways’ (the technology that facilitates/ approves payments) because many companies combine processors and gateways into one solution.

How does it work?

1. Your customer purchases a product or service with their payment card.

2. The payment gateway sends the transaction information to the merchant bank’s processor which directs the information to the purchaser's bank – this step is the ‘authorisation’.

3. Next is the verification. The cardholder’s bank will approve or decline the transaction before passing the data to the cardholder and merchant. 

4. If accepted, the transaction is complete. 

5. The cardholder’s bank transfers the money to the credit card processor which in turn sends it to the merchant’s bank. And that’s it. 

What's the best credit card processing tech for a small business?

Now we’ve covered the basics, let’s take a look at some of the most popular business credit card processors and their features and benefits. This list is by no means exhaustive – there are 100s to choose from out there. When searching, look for processors that have all the features you need as well as good rates for services. You may want to consider:

- Application and implementation time

- Transaction fees 

- Ancillary fees (preferably none)

- Fraud protection

- Features: shopping card, Point of Sale (POS) & virtual terminals, mobile card readers, analytics etc.  

Worldpay

Worldpay is a well-known payment gateway for online credit card processing and it also has a variety of options for offline processing. It comes with anti-fraud alerts that flag suspicious orders so that you can reject them and avoid harm to your business. You’ll have to pay a fee every month as well as transaction fees and if you’re on a Worldpay contract you’ll have to pay a charge if you exit early. 

Stripe

Stripe is flexible and cloud-based; it has fraud prevention as well as payment processing and a business intelligence solution named Sigma. You can also get your hands on terminals for facilitating payments through Stripe if you plan on taking credit card payments in store. There are no monthly fees but you will be charged 2.9% fee per transaction and a 30c processing fee.

Authorize.net

Authorize.net’s All-in-One solution enables you to process credit cards with no merchant account required. It costs $25 per month and like Stripe and others, fees start at 2.9%. The company’s merchant account gateway has a monthly fee, but transaction fees are lower. Lots of other features are included in the package and some can be obtained at an additional cost.

Sage

One of the benefits of Sage is that it’s that the company’s credit card payment gateway can integrate with Sage’s accounting software. Sage Pay also provides telephone processing and in-store direct debit processing. It has merchant account integration too and a host of services geared towards businesses of any size, from small startups to large enterprises.

Paypal 

Paypal is one of the most well-known payment processors, particularly for online businesses. It’s user-friendly, very quick and easy to set up and has a simple payment gateway integration for large ecommerce platforms. The processor’s small business offering has no monthly fees and transaction fees range from 1.9% to 3.4%, depending on your volume of sales.

iZettle

There’s no contract involved with this card processing platform and it can integrate with both Xero and Excel (it’s also compatible with iOS and Android and accepts Google, Samsung and Apple Pay). You can get a card reader and benefit from its POS, invoicing and eCommerce platform. There’s also a real-time analytics feature (that generates reports), which is handy for tracking performance. 

Paysimple

Paysimple is designed for small businesses and provides a range of products and services. It allows businesses to process payments flexibly and offers automated billing. There are a few customer marketing features included. You can accept customer credit card payments online, in-store or via mobile which can be a huge plus for versatile businesses. 

To test it out without committing, you can start a free 14-day trial. According to Paysimple’s website, there are no contracts or cancellation fees when you sign up. However, there is a monthly maintenance fee of $29.95 and other costs for back-end features of the site. 

Helcim

Helcim is another credit card processing company that is geared towards small businesses. It has $2.5 billion in annual processing and facilitates 15 million transactions a year. Pricing is transparent and according to the website there are no hidden fees. 

When you sign up for a Helcim account you can begin a merchant account application. You can also rent equipment on a monthly basis or purchase it outright, depending on your business’ needs. 

Once you’ve set up your account with your chosen credit card processor, your business can start accepting credit card payments. It’s as simple as that! Now you can focus on growing your business. If you’re planning to expand and require business finance to do so, use the Funding Options platform to see what you might be eligible for.