Customers expect a smooth and convenient payment experience, regardless of your business size. For SMBs, accepting credit cards has become an essential element to stay competitive and thrive.
While for bigger companies having a POS is the better way to manage their payments, freelancers and small biz owners have slowly migrated to online credit card payments.
These allow for an easy transaction, smaller fees and overall a simple digital payment system for their customers.
Today we’d like to show you the ins and outs of credit card processing for your small business. We’ll explore the different ways to accept credit cards and guide you through the process of choosing a reliable service provider and setting up your system securely.
Benefits of accepting credit card payments
Accepting credit card payments comes with a range of benefits for businesses, large and small alike. Here’s a summary of the key advantages:
- Increased sales and revenue: Accepting credit cards can significantly increase your sales because it allows customers who may not have cash on hand to make purchases. Credit cards also encourage impulse buying because of the ease of making payments. While not a perk if you want to save money, this can work in your favor.
- Convenience: Credit cards offer a convenient payment option for customers, enhancing their shopping experience. The flexibility to make large or unplanned purchases without needing cash immediately is a significant advantage for your clients.
- Improved cash flow: Transactions made through credit cards are processed and settled quickly, which means funds are deposited into your business account faster compared to checks or some other payment methods. This improved cash flow can be crucial for the daily operations of a business.
- Competitive advantage: Today, businesses that do not accept credit cards may find themselves at a disadvantage. By accepting credit cards, you align your business with customer expectations and preferences, potentially attracting a wider customer base.
- Global sales opportunities: For businesses looking to expand their market reach beyond local boundaries, accepting credit cards is essential. Credit cards are a universally accepted form of payment, facilitating easy transactions across different countries and currencies. For digital service providers for instance, having this payment option literally opens the entire world as potential business partners are concerned.
- Security and fraud protection: Credit card processors and networks offer advanced security measures and fraud protection that can reduce the risk of dealing with counterfeit cash or bounced checks. Businesses can also leverage the security protocols of their payment processors to protect against fraudulent transactions. In comparison, to protect your business from check fraud, you’d need to have enabled positive pay, which usually comes with extra fees.
- Easier online sales: For e-commerce businesses, credit card processing is essential. The majority of online transactions are done using credit cards, and accepting them enables businesses to capitalize on the growing trend of online shopping. Most online store platforms have this already available: WordPress (WooCommerce), Shopify, Open Cart, Magento, plus the various marketplaces (eBay, Etsy, Amazon)
- Business legitimacy: Accepting credit cards can lend credibility to your business. It signals to customers that your business is established and trustworthy enough to handle credit card transactions, which can enhance your business’s image.
- Detailed transaction records: Credit card transactions generate detailed records, which can help businesses with accounting and tax preparation. It simplifies tracking sales and understanding spending patterns, aiding in more informed business decisions. This is one of the perks our customers love at Finli, not only we offer instant invoicing, but we make available the entire transaction history. Clients love getting all their client information in one place.
Despite these benefits, it’s important to consider the costs associated with accepting credit cards, including transaction fees, monthly account fees, and equipment costs, for those opting for a POS.
Still, for many businesses, the benefits of accepting credit card payments far outweigh these expenses, making it a strategic choice for growth and customer satisfaction.
This is the main reason we have included credit card payments in our platform and we have slashed the fees (even giving you the option to pass these fees onto your customers). Here is a detailed view of our pricing system.
Steps to accepting business credit card payments
Find a credit card processing provider for your small business
Years ago small business owners needed to open merchant accounts, set up payment terminals and go through a lot of hoops to accept payments.
For our small business owners, who want to accept online payments, we made it all easier.
Just sign up, connect your bank account and we take care of the rest. No more hassle, no need to use third party payment systems like PayPal, Venmo, or Square. Finli now provides a seamless credit card payment with smaller fees that any of our competitors.
Credit card processing fees
- Interchange Fees: These are fees charged by the credit card issuing bank every time a credit card transaction occurs. They are a percentage of the transaction amount plus a fixed fee (e.g., 2% + $0.10 per transaction). Interchange fees vary based on card type, transaction size, and the merchant’s industry. These fees go directly to the card-issuing bank.
- Assessment Fees: Charged by the credit card networks (Visa, MasterCard, etc.), these fees are based on a business’s monthly transaction volume. Like interchange fees, they are a small percentage of each transaction but tend to be much lower (e.g., 0.13% for Visa).
- Payment Processor Fees: These fees are charged by the payment processor or merchant services provider for handling credit card transactions. They can be structured in various ways:
- Flat-rate pricing: A fixed percentage of each transaction plus a flat fee (e.g., 2.9% + $0.30 per online transaction).
- Tiered pricing: Different rates are applied based on the type of card used and how the transaction is processed (e.g., lower rates for swiped cards and higher for keyed-in transactions).
- Interchange-plus pricing: The actual interchange fee plus a fixed markup by the processor (e.g., interchange fee + 0.3% + $0.10).
Waive most of these fees with Finli. Create an account and, with just $39/month you have access to various payment types (ACH, credit cards, pay-by-link), while also being able to pass credit card processing fees to your customers.
The easier way to accept credit card payments as a small business, without sky-high fees and cumbersome software to manage.
