Benefits Of Accepting Credit Card Payments
Allowing your customers to pay with credit cards can yield a number of advantages for your business that could lead to greater growth. According to the National Federation of Independent Businesses, the major reasons to accept credit cards include:
- Improving cash flow, since it can speed up payment times and reduce delays
- Legitimizing your business in the eyes of customers
- Potentially boosting sales volume since your customers will have more ways to pay
If you’re still not sold on the idea of accepting cards, consider the growth of credit card payments compared to other payment methods. Research from Deloitte shows that credit cards made up nearly $4 trillion in payment volume in the U.S. in 2018. Between 2016 and 2018, credit card transactions increased, while the percentage of Americans using cash to pay declined.
That’s a trend that may continue if demand for contactless and/or digital payments also rises. As a result of the 2020 economic crisis, for instance, 64% of small businesses said they were trying to steer clients away from using cash and checks in favor of digital payments, such as credit cards. Credit cards could become an even more common payment method as Americans move a greater portion of their transactions onlineeven when buying from brick-and-mortar businesses, such as local restaurants offering delivery services or stores with curbside pickup.
Merchant Account + Payment Gateway
The traditional method for accepting payments online has been a combination of a merchant account and a payment gateway. Providers like SecureNet , Authorize.Net and eWay fall into this category.
A merchant account is a special kind of business bank account that lets you accept credit card payments.
An online payment gateway connects your store and your merchant service account, and facilitates the processing of the payment transaction between the various parties involved, including your bank and the card issuers bank. Think of it as the digital version of a used in brick-and-mortar stores.
There are fees associated with both the merchant account and payment gateway, but there are a lot of options out there, and some have more competitive transaction fees or dont charge setup fees.
Payment gateways can also offer greater control over security rules and customization they may be a better fit for large businesses needing a more tailored solution.
One thing to note about using a merchant account/payment gateway combo is that youll need to apply for both, usually filling out forms and providing some financial information. Processing your applications can take a few days, so you wont be able to jump right into accepting payments. After both have been approved, youll need to connect your account to the gateway and then your gateway to your store. Usually this involves configuring your store with API keys, shared secrets and tokens.
Vintage Old And Unique Credit Cards As Collectibles
The design of the credit card itself has become a major selling point in recent years. A growing field of numismatics , or more specifically exonumia , credit card collectors seek to collect various embodiments of credit from the now familiar plastic cards to older paper merchant cards, and even metal tokens that were accepted as merchant credit cards. Early credit cards were made of celluloid plastic, then metal and fiber, then paper, and are now mostly polyvinyl chloride plastic. However the chip part of credit cards is not made from plastic but from metals.
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Pay Attention To Credit Card Payment Processing Fees
Accepting credit cards through a merchant account or payment service provider isn’t free both charge service fees to facilitate those payments. As you get ready to accept credit card payments, consider how those fees factor into your operating and overhead costs.
If the fees are going to take a serious bite out of profits, you might compensate by increasing prices for your products or services. Or you could add on a surcharge or convenience fee for processing credit card transactions below a certain dollar amount. But be sure you’re aware of state and federal regulations on credit card surcharges to avoid any illegal practices.
Pay Credit Card Bill Offline Through The Atm
- If you have a debit card from your credit card issuer or bank, you can walk-in to the bank’s ATM to pay the credit card bill.
- Visit any nearest ATM of your credit card issuer with your debit card, insert your debit card into the ATM kiosk, select credit card bill payment option and follow the instructions to make credit card payment.
- Usually, the bill payment through ATM is instant as the amount gets transferred from your savings or current account to your credit card account.
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What If My Account Has A Zero Balance When I Make A Credit Card Return
If your credit card has a zero balance when the return is processed, a credit is generally added to the account that can be applied to future purchases. If your card remains inactive with a negative balance for several months, the credit card issuer will likely send you a check for the credited funds. You can also call your credit card company to request that a check for the account credit be mailed to you, thus eliminating the wait.
If there is a balance on your credit card when a refund for a purchase from a previous billing cycle is issued, then the credit will simply be applied to your account, reducing your existing .
If you made a purchase then carry a balance into another statement period you may be charged interest. When you make a return, that interest will not be refunded.
Consumers dont always return items immediately or even within the same billing cycle. Sometimes its not even close. Months may pass between the date of the original purchase and the return of an item. Youll still see the returned funds in your credit card account, but youll be on the hook for any interest that was charged in the meantime.
Cant find your issuers phone number? Check out our listing of Backdoor Issuer Phone Numbers.
When Is Your Credit Card Payment Considered Late
Credit card payments are due the same day and time every month, often 5 p.m. or later. A credit card payment can’t be considered late if it was received by 5 p.m. on the day that it was due, according to the CARD Act.
Some card issuers may set a later due date if you pay your bill online, giving you even more time pay. For example, if you have a Chase credit card, such as the Chase Sapphire Preferred® Card, you have until 11:59 p.m. ET to make your payment online.
It’s important to review the terms of your credit card to find out the exact cutoff time for when a payment is considered on time versus late.
Find out more about what happens when you miss a credit card payment.
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How Does Credit Card Processing Work
Once the card is entered into or tapped on the credit card machine, the authorization begins. is the process where the issuer approves or declines a transaction. Merchants use it to ensure customers have sufficient funds available when they purchase something. 1. The credit card information enters a payment gateway, which serves as a connector between the merchant and a payment processor . 2. The payment processor will take this information and send it to the card brand . 3. The card brand sends this information to the issuer.When the issuer receives the cardholders information, authentication begins.1. The issuer will verify that the cardholder has sufficient funds in the credit line to approve the transaction. 2. They may also check the card verification value and ensure the billing address matches what is on file to prevent fraud.3. If the transaction is approved, the merchant receives authorization, and the issuer places a hold for the amount of the purchase on the customers account. The card reader or POS terminal should see a message that says, Approved.4. The merchant gives the cardholder a receipt at the end of the sale.
At this point, the payment verification process is complete.
How Does A Billing Cycle Work
The billing cycle starts the day your card is activated. Depending on your credit card, even though you may not have made any transaction, the card may charge activation fee which will reflect on your statement generated next month. In case you are looking to transfer your balance to your credit card, then all the previously completed transactions get added to it. Other charges such as EMIs, finance charges, fuel surcharge waiver, amount refunded, etc. will all reflect on your next month statement. It is your duty to ensure you pay the credit card for the bill generated during the cycle.
Once you make any transactions on the 6th day of the month, then the bill for it will be generated in the next months bill for which you will have more time to pay.
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How Long Do Paypal Refunds Take
The timeframe for PayPal refunds varies depending on which method you used for payment through PayPal. If you used a credit card, it can take up to 30 days. If you used a bank account, it takes 3-5 business days. If your PayPal balance was used, it will be refunded the same day the refund is issued. A debit card will take up to 30 days.
An Introduction To Accepting Payment By Credit Card
Learning how to accept credit card payments can potentially increase your sales potential. To connect with more customers in person and make any financial transactions online, credit card processing is an essential service. This guide covers the basics of accepting credit cards at your small business.
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Linked Checking And Credit Card Accounts
If your credit card is linked to your checking account, that is, both accounts are with the same bank, your credit card payment will post to your account the same day. This is the case with Bank of America, for example. Of course, you’ll need to be sure the funds are available in your checking account.
Pay Credit Card Bill Online Through Neft
– Within 1 working day
- NEFT funds transfer is another online facility that allows you to make credit card bill payment using any net banking account.
- Through NEFT, you can pay credit card bills of a bank using any other bank’s internet banking account. The facility allows you to transfer funds from your savings account to the credit card account online.
- However, before initiating NEFT funds transfer to your credit card, you need to add your credit card, towards which you’re making the payment, as a ‘Biller or Beneficiary’.
- To add the credit card as a beneficiary, you might need specific details such as credit card number, cardholder name, IFSC code for credit card payments, bank name, branch, address, etc.
- Please note that the IFSC code is unique for credit card payments. Please make sure you get the right code before initiating the payment.
Adding a new card would take 30 minutes to 24 hours based on your bank. You need to wait till the card is added and then initiate the NEFT funds transfer.
To know the process for NEFT credit card bill payment of various banks, please follow the links below.
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How Payment Processing Works Whos Involved
Understanding credit card processing basics allows you to make better-informed decisions about which payment solutions are best suited for your business. For example, you can avoid unnecessary add-ons and fees by designing a payment environment that only delivers the specific features you need to securely, quickly, and easily process incoming card-based sales.
In the next section, well explore the details of how payment processing works. First, we need to meet the key parties that make each transaction possible:
- The cardholder is the customer who initiates an in-person or online purchase using a credit or debit card
- The card issuer is the bank that provides its customers with consumer plastic
- The merchant is the card-accepting business owner selling whatever goods or services the customer is trying to purchase
- The payment processor is responsible for securely routing the transactions captured by the merchants point-of-sale device to the customers card-issuing bank for approval
- The card association is the network maintained by the major brands . This card association is responsible for setting fees, resolving disputes, and establishing security guidelines for the network
- The acquiring bank is what the merchant uses to ultimately collect funds from the issuing bank. This may be the same entity as the merchants payment processor
How Do Credit Card Refunds Work
If youre a merchant taking payments via credit cards then it has to be expected that every now and then youll be asked to make a credit card refund. There are strict rules governing when a full refund has to be paid, and each merchant will have their own specific credit card refund rules over and above statutory consumer rules. You may choose to offer a credit card refund when youre not legally bound to do so, for example, in order to foster consumer goodwill and
No matter what the circumstances are, knowing how to process credit card refunds securely and at speed will help any merchant to generate customer satisfaction and good word of mouth.
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Q2: Do I Need Vulnerability Scanning To Validate Compliance
A: If you qualify for certain self-assessment Questionnaires or you electronically store cardholder data post authorization, then a quarterly scan by a PCI SSC Approved Scanning Vendor is required to maintain compliance. If you qualify for any of the following SAQs under version 3.x of the PCI DSS, then you are required to have a passing ASV scan:
- SAQ A-EP
Pay Credit Card Bill Offline By Calling Customer Care
- Some credit card issuers or banks allow you to pay your credit card bill by calling the respective customer care. However, in order to use the channel, you must have a savings or current account with the card issuer or the bank.
- If your bank account and credit card are from the same issuer, you can to pay your credit card bill.
- In most cases, the IVR would guide you through the payment process without human intervention. Hence, your card details and other information remain secure.
- However, not all card issuers would provide the facility. Check with your respective card issuer before making the payment.
- Payments made through the customer care are typically instant.
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What Is Payment Processing
Payment processing describes the steps required to move money from a successful sale into your businesss bank account as quickly, cost-effectively, and easily as possible.
While accepting cash payments is fundamental for many businesses, accepting credit cards is a key part of expanding.
According to one study, 30 percent of all transactions were paid with cash, suggesting the majority of consumers rely1:
- Directly on credit card processing
- Indirectly on CC processing
Any business unable to process credit card payments risks missing out on a large percentage of potential sales.
To help ensure this doesnt happen to you, its important to understand what credit card processing involves and how payment processing works behind the scenes.
Paying Your Credit Card Online Or By Phone
While paying your credit card online or by phone is a lot faster than by mail, contrary to popular believe it takes time its not instant. It typically takes one to three business days for a payment made online or by phone to be posted to your account and reflected in your available credit. It can take longer if your credit card isnt with the same bank where you do your daily banking. For example, if your chequing account is with TD Bank, but your credit card is with Scotiabank, it may take up to three business days for your payment to be posted. If youre making a payment on Friday night, it could take until Wednesday the following week for your payment to be posted, leaving your short on credit for a few days.
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When Are The Transaction Fees
Fees are automatically deducted from payments before theyre deposited into your account, so you dont have to worry about paying them yourself every single time you process a transaction.
The exact amount deducted from your funds will depend on the fee structure you have with your payment processor. When youre in the process of finding a payment processing provider, look out for
If youre working with aninterchange plus fee structure, each transaction will have a different fee applied to it thanks to variables in card type, issuing bank, entry type and moreyou have no way of knowing the final amount that will be deposited into your account.
If youre working with a tiered fee structure, youll have a set percentage and transaction fee for each transaction tier. Typically, qualified transactions will have a favorable rate, while mid-qualified and non-qualified transactions will cost you a lot more. Unfortunately, you get no say over how your transactions are classified, and the majority of your transactions are likely to be processed with the less favorable rates.
If youre working with a flat fee structure, youll have one fee for card-present transactions and one fee for card-not-present transactions, no matter the card type. You can calculate the expected amount youll be paying on each transaction by applying the flat rate for that transaction type.