{"id":3362,"date":"2022-08-19T17:12:23","date_gmt":"2022-08-19T22:12:23","guid":{"rendered":"https:\/\/www.northone.com\/blog\/?p=3362"},"modified":"2023-05-16T10:53:03","modified_gmt":"2023-05-16T15:53:03","slug":"cheapest-way-to-accept-credit-card-payments","status":"publish","type":"post","link":"https:\/\/www.northone.com\/blog\/financial-management\/cheapest-way-to-accept-credit-card-payments","title":{"rendered":"The Cheapest Way to Accept Credit Card Payments"},"content":{"rendered":"\n

If you start an e-commerce company<\/a>, being able to take card payments is practically mandatory. While many people use debit cards for a majority of their purchases, consumers are also incentivized to use credit cards, whether it\u2019s because they\u2019re making large purchases or because they receive rewards for shopping with their credit card. Unfortunately, card payments also come with associated fees \u2013 and credit card fees are substantially greater than those associated with debit cards. When you need to maximize profitability, finding the cheapest way to accept credit card payments can make a big difference.<\/p>\n\n\n\n

If you\u2019ve never taken credit card payments before, start by doing a little research. Instead of going with the first payment processor you find, take the time to understand how their fees work and how they compare to other processors.<\/p>\n\n\n\n

Here\u2019s an overview of how credit card payments work, and the cheapest way to accept them.<\/p>\n\n\n\n

<\/span>Why does accepting credit card payments cost your business money?<\/strong><\/span><\/h2>\n\n\n\n

Ever wondered why businesses stay \u201ccash only,\u201d even in this day and age? It\u2019s primarily due to the fees involved with accepting card payments, and particularly credit card payments. To keep prices down and profits up, merchants try to cut out credit card processing fees. But it\u2019s not a practical solution for most companies.<\/p>\n\n\n\n

So, why do the fees exist? Credit card processing companies offer a service. When a customer offers their credit card information, you can\u2019t just assume they have enough credit to make their purchase. Your point of sale (POS) system and credit card reader collect the information. This includes credit card and customer information, the purchase amount, and other relevant details. The system sends the transaction information to a third-party processing company.<\/p>\n\n\n\n

Once the information is received, the processor performs a two-part service. First, they verify with the credit card company whether the customer has available credit. Next, the processing company pays the merchant, usually by sending the funds\u2014minus fees\u2014to their bank account.<\/p>\n\n\n\n

Trying to do all of this on your own would be time-consuming and expensive. The fees pay for the service provided, and are usually far cheaper than the alternative.<\/p>\n\n\n\n

<\/span>Choosing a payment processor<\/strong><\/span><\/h2>\n\n\n\n

Choosing a payment processor can be intimidating. Fees and equipment setup vary dramatically between processors. Some processors are better suited for e-commerce, some are strictly in-person, and some offer the ability to do both.<\/p>\n\n\n\n

When choosing a processor, follow these steps:<\/p>\n\n\n\n