Credit-Card Processing Options For SMBs - InformationWeek

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9/23/2009
06:38 PM
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Credit-Card Processing Options For SMBs

It's a fact that adding payment options boosts sales, whether online, in brick-and-mortar stores, or even remote locations. Resource Nation helps small businesses understand how to leverage their credit-card processing options to increase revenue and speed payment.

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Online Invoicing And Billing
Medical offices, freelance Web designers, consultants, and other professional service providers can make customer payments easy and fast by offering online payment options. Most consumers are already familiar with online bill payment or automatic payments -- large corporations such as banks and insurance companies use these methods to collect customer payments. Smaller businesses can use these services, too.

The "gold standard" for online bill payment is probably Intuit's widely used QuickBooks Merchant Services program. This is purchased software that let you track client orders, invoices, and payments. Many online invoicing tools (free programs like BlinkSale, Intuit's BillingManager, and others) are designed to be compatible with QuickBooks, and provide extra features like employee-hour tracking for invoicing purposes.

Purchased software isn't your only option when it comes to online invoicing. Hosted services like FreshBooks (low cost) or BambooInvoice (free, open source) not only help you keep track of client payments, but also allow you to accept credit card payments for invoice balances. If tracking and managing invoices isn't a concern, you can also use an online payment service by itself -- services like PaySimple or DepositNow let small businesses accept credit cards, electronic checks, debit cards, and bank transfers online.

E-Commerce Processing
It's a fact: more payment options increase e-commerce sales. If you have an online storefront or offer online services, accepting credit cards is a must.

Online credit card processing works a bit differently than physical card transactions: for one, you don't need a swipe machine or a signature-capture device, and you don't need to store signed customer receipt records.

E-commerce transactions consist of three components:

  1. The site infrastructure that allows the payment (the shopping cart).
  2. The "gateway" processing software.
  3. The merchant account.

Many shopping cart programs include gateway processing software (the virtual equivalent of a magnetic swipe machine) that can link to your existing merchant account.

Fees for online credit card processing are assessed the same way as those for physical processing: on a "per transaction" basis, usually with some kind of attached flat rate (for example, 20 cents plus 1% of the transaction amount) or monthly minimum charge.

Some account providers require you to use their gateway software, and some shopping cart providers sell services as a "bundle," where you're bound to a specific merchant account provider. You'll have to shop around and compare costs to make sure that bundled services are actually a good deal.

These days, even the smallest merchants can take advantage of credit cards and other electronic payment methods. Accepting credit cards or online payments can be one of the best ways to capitalize on consumers' growing reliance on fast, simple transactions -- and that's especially true for non-traditional or mobile selling locations. Whether you're accepting credit cards at a festival concert or through your Web site, it pays to offer your customers the most convenient payment options possible.

Resource Nation provides how-to purchasing guides, tips for selecting business service providers, and a free quote-comparison service that allows business owners to compare price and service offerings in over 100 categories from credit card processing to point-of-sale (POS) systems.

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