3 Must-Know Facts about Payment Processing Before Getting Started
According to a recent Gallup poll, the majority of Americans expect the U.S. to be a cashless society in their lifetime. They believe all transactions will be made using credit and debit cards along with other forms of electronic payments. This view seems realistic judging by the rapid growth in credit and debit card usage. Which is why it’s more important than ever for merchants to know the facts about payment processing to accept credit and debit cards.
The good news is a quality payment processor can make this easy.
There are three primary areas to focus on when setting up payment processing.
Payment Processing Technology
Selecting the right technology to process payments can be overwhelming, given all the options. To begin, it’s best to analyze your business needs, your customers’ payment preferences, and how you want to accept payments. Do you want to just sell in-store, or online, as well? Want to offer customers the ability to use mobile wallets such as Apple Pay and Android Pay? Do you want to be able to accept payments remotely?
Once you determine how you want to accept payments, it’s time to look at hardware and software that meets those needs. For in-store payment acceptance, two options are a smart terminal that can process most any type of payment securely, or a more advanced POS terminal that can do the same plus integrate with your other business systems.
If you want to sell remotely you’ll need a virtual terminal and perhaps a card reader for your mobile device. Your payment processor should be able to help you make these decisions. Make sure they are focused on your needs and not merely selling you hardware. It’s important that the technology you invest in can be upgraded in the future if necessary.
Payment Processing Security
Credit card theft and fraud, along with data breaches, represent a potentially large expense for small businesses. Fortunately, payment security technology is advancing rapidly, helping to protect merchants selling in-store and online.
Payment security protections are especially important as liability for certain types of credit card fraud has shifted from issuing banks to merchants, per the EMV liability shift that took place October 1, 2015. Now, if a merchant processes a chip card on a device that is not enabled to accept EMV, they can be held liable for certain types of fraud. In an EMV transaction, a unique code is sent for each transaction. Unlike the magnetic strip of a traditional payment card, an EMV chip card doesn’t expose the customer’s actual data.
Another technology available to protect payment data is a point to point encryption or P2PE. This technology encodes data so it can only be read by those it is intended for by using a unique key. P2PE is used to protect data throughout the entire transaction process, greatly decreasing the potential for stolen data and providing a much greater level of security over traditional means of data communication.
Tokenization is another technology tool used to secure data and is effective for securing post-authorization transactions such as recurring billing and tip adjustment. Tokenization replaces sensitive card data with a unique, generated placeholder, or token. The token is used to access the cardholders’ actual information, which is held at a secure, offsite location. The token has no meaning by itself and is useless if stolen, adding another layer of security to the transaction.
Payment Processing Service
At a glance, all payment processors may seem very similar to each other. It’s important to look beyond just the equipment they offer and investigate the type of support they provide. Your processor should be available to help analyze your and your customers’ payment needs.
They should make sure your system is implemented properly and provide training tools, such as manuals and online videos. Most important, your processor should provide quality customer support. Make sure your system is always up and running, with assistance from knowledgeable representatives whenever you need it, 24/7/365.
If you aren’t accepting credit and debit cards, you really should. The vast majority of shoppers prefer to use cards and will often avoid a retailer that won’t accept them. Setting up payment processing isn’t hard, but it’s important to have a complete understanding of how it works. Take the time to research and find a quality payment processor who can help you with the entire process.