According to a 2020 Statista report, credit cards were the most widely used payment method in Canada in 2019 and 2020. Credit card penetration has reached around 77% of the population. The world has gone digital.
Every day, businesses strive to provide quicker, safer, and more efficient modes of payment to better suit their customers. Credit cards and online payments are gradually becoming the norm. Customers are more inclined to purchase from you when your company offers credit card payments and they are expecting to see credit cards as a payment option.
If you are still on the fence about accepting credit card payments from customers, you should stop asking yourself if and start asking when. You should also be asking yourself what is the best way for your business to accept credit card payments.
This article will explain why you should accept card payments for your business and how to find the best option when setting up your online payments.
Advantages of accepting credit card payments
1. Cash flow
Cash flow is the life of any business because it ensures your business can run effectively. You can’t afford to wait 4-5 days until a cheque clears or a bank transfer comes through. Accepting credit cards allows you to get paid instantly.
With credit card payments, you receive your money in real-time. The longest it takes to receive a payment by credit card is 48 hours, which is faster compared to ACH or wire transfers.
Credit card payments are effortless for both you and your customers compared to ACH, wire transfers, or paper cheques. All it takes is a simple online checkout. You can accept payments online from your customers anytime, anywhere.
3. Customer experience
Giving your customers the option to pay via credit card can also improve their purchase experience and be a deciding factor in their buying decision.
For your customer, paying via card is much easier than remembering their routing information or carrying around cash or cheques. Many customers also prefer paying by credit card to take advantage of rewards programs, such as airline miles or cash back. This increases customer satisfaction as they can earn something while making purchases.
Research shows people spend more when they are not limited to cash. This means you can entice your customers to spend more by adding credit cards as a payment option.
How to accept credit card payments online
1. The traditional approach: Merchant account + Payment gateways
Traditionally, a business has to apply for a merchant account and a payment gateway to take credit card payments online. A merchant account is a type of company bank account that allows you to accept credit card payments. It links your merchant service account to a payment gateway and simplifies the processing of payment transactions, including for your bank and your customer’s bank.
You are required to apply for the merchant accounts and payment gateways separately, and you won’t be able to begin receiving payments until both applications are processed. This process can take several days.
Your account must be linked to the gateway, which must be connected to your store. You will usually have to set up API keys, shared secrets, and tokens in your store first.
This method can be complicated and costly to set up. You should also consider potential fees associated with merchant accounts and payment gateways. However, payment gateways give you more control over security rules, and customization once set up. Generally speaking, this option is best suited for larger companies.
2. Simplified solutions
These payment providers simplify the payment process and charge lower fees than the traditional approach, making it more accessible for small businesses and startups. With most of these providers, you do not require a merchant account. They make it easier to accept all major credit and debit cards and usually have a cheaper pricing structure.
The best payment provider for you depends on your type of business and the services you offer. Here are some options to consider when choosing a simplified online payment service processor.
a. Square and PayPal are common solutions for e-commerce businesses. They are popular because of low processing volume requirements, and easy to set up software. They also allow you to accept all major credit cards and can have favourable transaction rates.
While these services are a popular choice to get an e-commerce business up and running quickly, you should note that you are limited in customizing customers’ payment experiences.
b. Stripe is another payment solution that is common with startups who want to build a more tailored payment experience. However, setting up Stripe can be tricky and requires technical know-how to integrate the payment processor into your business payment options.
c. MazumaGo is a payment solution catering to companies collecting high-volume payments from customers. With MazumaGo, you can send no-limit payment requests to your customers via email or by adding a payment link to an invoice.
The checkout process is simple. Customers can accept the payment request via bank transfer for free, or pay via credit card. If your customer chooses to pay via card, they will carry the additional fee, not you.
This means you can give your customers the option to pay via credit card without paying high percentage fees for payments or completing a lengthy setup.
Getting started with credit card payment processing
Giving your customers different payment options is an essential part of creating a competitive customer experience. Your payment options can be a deciding factor in your customers’ buying decisions and people tend to buy more when paying online or via credit card.
Figuring out the best ways to accept credit cards online and choosing the right payment provider can be overwhelming but it’s worth it. Let’s face it: Credit cards aren’t going anywhere, and you don’t want to be the last one to jump onboard.