What to look for in a credit card processor.
Credit: Credit card image via Shutterstock
There's no denying it: accepting credit cards can be a boon for small business. But before you start reaping the rewards of your new payment solution, you'll have to figure out how and where to get a credit card machine. While that might sound simple enough, your equipment options may be much more complicated than you think.
The first thing you'll need to decide when selecting your credit card processing equipment is exactly what tools are best for your business. Here are some of the options available for merchants, including how and where to purchase them.
Fully integrated point-of-sale (POS) systems
For retail merchants looking to keep track of inventory and sales all in one place, opting for a full POS system over a stand-alone credit card machine might be the best option. Most of today's point-of-sale systems include the software you'll need to start accepting credit cards, as well as the proper hardware (pin pads, card readers) for accepting credit card payments.
If you already accept credit cards in your retail establishment but are looking for a POS solution, you'll want to make sure that your payment processor is supported on the POS system you choose. Many of the most popular payment processors, like Intuit and PayPal, are supported on many POS platforms. But merchants should do their research to ensure that their processor and desired POS system are compatible before purchasing any equipment or software.
If you already have a POS system in place and just need additional hardware to process credit cards, keep reading for the best equipment options.
Where to buy it: POS hardware/software company, merchant service provider, merchant equipment retailer
You can purchase a POS system directly from POS software and hardware manufacturers.
You can also purchase the hardware you'll need for your POS system from an equipment retailer, like Staples or Merchant Warehouse. Many hardware manufacturers also include a free POS software trial with your purchase.
Countertop and wireless credit card terminals
Credit card terminals are used in conjunction with digital or electronic cash registers in many small and midsize businesses. Merchants receive a credit card terminal when they sign up for a merchant services account. These terminals vary in cost and quality depending on the processor.
Where to buy it? Merchant service provider or merchant equipment retailer
Some merchant service providers offer free equipment to merchants signing up for a new account. Others charge for credit card processing equipment but offer free yearly upgrades to newer equipment. Merchants can purchase additional credit card readers or wireless terminals directly from their service provider.
Of course, if you're not satisfied with the hardware options offered by your merchant service provider, you can shop around at merchant equipment retailers. Merchant Warehouse and other online retailers offer a wide selection of credit card processing hardware that comes fully programmed and ready to use.
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Mobile card readers
Many of today's most popular credit card processing companies — like Square, PayPal and ROAMpay — aren't in the business of selling bulky equipment. These mobile-minded companies provide merchants with palm-size credit card readers that plug into the audio or charge ports of smartphones and tablets. Popularly referred to as "toggles," these mobile card readers don't even require a pin pad for debit card payments. Customers enter their PINs directly into the merchant's mobile device via the card processor's mobile app.
Where to buy it: Merchant service provider or mobile credit card processing company
Most merchant service providers now offer mobile payment solutions to merchants. This typically includes a free app for merchants to download, as well as a free card reader for accepting payments on a mobile devices. Some merchant service providers and mobile processing companies do charge for mobile card readers, and most charge for additional card readers.
If you're not yet accepting credit cards and you're just looking for a mobile payment solution for your business, check out our list of mobile payment services.
Dual-interface ('chip-and-PIN') terminals
MasterCard and Visa recently announced that they will be accelerating the adoption of EMV chip technology in the United States. The EMV standard— named for the standard's originators— was developed by Europay, MasterCard and Visa in 1999 and has since replaced the magnetic-stripe standard in Europe.
By October 2015, Visa and MasterCard will require merchants to start accepting "chip-and-PIN" cards alongside regular magnetic-stripe credit cards. This, of course, means that merchants will need to upgrade to newer equipment.
The dual-interface terminals required to accept chip-and-PIN cards will also make it possible for merchants to accept other forms of chip-supported payments, like contactless payments from key fobs and smartcards. Merchants who don't yet have a way to accept contactless payments from customers via near-field communication (NFC) or radio-frequency identification (RFI) should also consider upgrading their terminals to keep up with new payment trends.
Where to buy it: Merchant service providers and acquiring banks
To find out what dual-interface and contactless options are available to you, call your merchant service provider or acquiring bank.
USB card swipers
USB card swipers are typically used in conjunction with a virtual terminal on a merchant's personal computer or mobile device. A virtual terminal is a Web-based software application that makes it possible for merchants to accept credit card payments from any computer or device connected to the Internet. The merchant can either run a card through the USB card swiper or fill in an online form with a customer's credit card information for automatic credit card processing over the Internet.
Where to buy it: Virtual terminal provider or merchant service provider
Virtual terminal providers, as well as many merchant service providers, sell USB card swipers. One of the benefits of this no-frills approach to credit card processing is that merchants can accept payments on the go.
Originally published on Business News Daily.