With cash taking more of a back seat every day, even micro-companies are accepting the fact that they need to take credit and debit card payments in order to survive and appeal to the preferences of their customer base. But what is the most effective method out there to securely accept these types of payments? As you may have guessed, there is no cookie-cutter solution that works for every company, and there are several effective options that meet the varying needs of today’s websites and physical stores.
Traditional point of sale systems.
Most customers are familiar with the point of sale or POS device that reads their credit card and communicates with the processor to complete the purchase transaction. This can either be run on a “dumb” system that does nothing more than securely accept payments, or on a smart credit card terminal that interfaces with a more powerful software network that streamlines many other business functions such as inventory and employee management, customer relationships, and report generation. Most of these systems can also be configured to accept other types of payments, including via digital wallets, mobile phones, and ACH.
Mobile point of sale systems.
When a company conducts many of its purchases away from its physical location, or when it makes sense for sales associates to be able to process purchases throughout the sales floor, mobile payments via mobile POS systems are ideal. Today’s Tap to Pay on iPhone feature allows your staff to complete the transaction using an iPhone. With no additional hardware needed, the customer simply puts their mobile device or credit card near the salesperson’s phone. Thanks to near-frequency communication technology, the transaction will be securely processed within a matter of seconds.
Online payment gateways.
When people purchase goods and services over the internet, the need for security is stronger than ever. That’s because there is no way for the business owner or cashier to be able to see the person’s physical credit card.
In order to promote optimal security throughout the online purchase process, ecommerce companies usually opt to work with a payment gateway. This web application acts as an intermediary between the customer and merchant, helping to screen and facilitate a fast and efficient purchase. In order to interact with the gateway, a customer will be asked to enter their 16-digit credit card number, expiration date, and security code into the system. The application then connects with the cardholder’s bank to ensure that there are sufficient funds, also screening for any red flags that might signify a security breach. If all goes well, the payment is accepted, and the funds are moved from the customer’s account into the seller’s.
Peer-to-peer payment platforms.
Until January of 2022, many small businesses used peer-to-peer apps like Venmo and PayPal when taking customer payments. These apps connect directly to a buyer’s bank account or credit card, withdrawing the specified amount and transferring it to the merchant quickly and efficiently. Since then, however, a change in the tax code now requires that companies report any transactions over $600 received via those apps and pay the required taxes. As a result, this method has lost some of its luster with many small businesses and their customers.
Virtual terminals.
If a company takes phone or mail order purchases, one of the best ways to enter card information is via what is known as a virtual terminal. This simply means that the customer would verbally tell you their payment data over the phone or provide it in writing on a catalog order. You or your staff would manually input the information into your POS terminal or online virtual payments interface.
No matter which solution you decide to incorporate into your business, it is crucial that you work with a reputable payment processing company that provides updated security and is in compliance with the Payment Card Industry Data Security Standard (PCI DSS), a set of requirements set forth by the industry to protect cardholders. Additionally, you should keep data security as your highest priority by instituting robust authentication and anti-fraud measures both on your website and In your physical store. Once these options and protocols are in place, you can look forward to a customized payment experience that protects each customer and takes their individual needs and preferences into consideration.
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