Your Company and Credit Card Payments: What You Need to Know

Let’s do some time traveling. We’re going back to about ten, maybe fifteen years ago. Back then, a business that wanted to accept credit cards had it a little tougher than we do now. You needed very specific (and often expensive) merchant licenses in order to accept such a payment. You didn’t only need that license; you also needed the hardware to accept credit card payments. It wasn’t cheap, and many small businesses suffered as a result.

Whoosh! That was the sound of us returning to 2016. It’s been nearly a couple of decades since we started really getting into online shopping. It’s nowhere near taking over brick-and-mortar industry; comparatively, it’s actually still pretty small. But it’s such a big business that it’s now so much easier for companies to get started with credit card payments.

It’s not exactly a breeze, though! There’s still a lot to do and a lot to consider. So how do you get started?

One way: merchant accounts and payment gateways

If you’re going to be accepting payments online, then you’ll probably need two things before you even start setting up your store. The first of these is an Internet merchant account. This gives you the legal right to accept credit card payments online. Most people get these directly with a bank. You can also go to an independent sales organization, who will be the middle-person between your customer and yourself. They will get card transactions to the bank to be processed.

Why would you go with a go-between instead of going directly to the bank? Banks tend to charge higher fees. The time it takes to set up can also be pretty long. ISOs can be much quicker, easier and cheaper to deal with.

You’ll also need a payment gateway. Generally, these can be provided with the Internet merchant account. That makes your life a lot easier!

Another way: PayPal

You’re no doubt familiar with the name PayPal. You have PayPal to thank for helping online shopping get to where it is today. It has made payment processing so ridiculously easy for both the buyer and the seller.

One of the perks of a service like PayPal is that you don’t need to set up an Internet merchant account or payment gateway. It’s all done for you through PayPal. It’s very popular with startups due to its ease of use and low cost. If you’re just starting out with your idea, you may want to go with PayPal at first. It’s a good way of testing the waters with your business ideas and card payment potential. eBay used PayPal when they were just a startup. Of course, the service worked so well for them that they still use it today!

Either way: making sure you’re compliant with law

Ah, the law! No matter what your plans are, you’re going to have to think about the legalities sooner or later. Of course, we’re all thankful for consumer-protection measures, so let’s not complain for too long.

When you deal with credit card payments, you’re dealing with sensitive and personal information. Things like the Payment Card Industry Data Security Standards (or PCI DSS) have been put in place for this reason. PCI DSS is government-enforced, so make sure you’re compliant!
You also need to review the terms and conditions of whatever of the above service you use. Things like PayPal and Internet merchant accounts have a number of rules you cannot break. Though legal action may not be taken against you, you may have to pay penalties. You could also risk account closure. In short: make sure you’re behaving!