With the growth of e-commerce and digital payments, retailers and service providers that fail to offer card payment options to their customers could potentially miss out on sales. Three ways to accept credit card payments However, payment aggregators come with their own drawbacks and concerns, which we’ll discuss a little later in this article. This can save some hassles upfront, since you don’t need to establish a separate merchant bank account to accept credit card payments through these services. If you use a payment processing service such as Paypal, sometimes called a payment aggregator, the “acquiring bank” is replaced by the third-party payment processing service. Finally, there is the acquiring bank, which is the bank accepting payment and providing credit card processing services on behalf of you, the merchant. Third, there is the issuing bank, the financial institution that gave the cardholder the credit card, essentially extending a revolving loan. Second, there’s the cardholder, the customer using a credit card to purchase your good or service.
On the other hand, credit card processing methods require the services of multiple parties.įirst, there’s you, the merchant, who ultimately receives the payment. It’s easy and there’s no need for other parties (except maybe a cashier) to be involved in the transaction.
When a customer pays with cash, of course, the money goes into a register and later gets deposited into your bank. How does the money get from the customer’s credit card into your bank account? Whichever method you use to accept debit or credit card payments, you’ll want to understand what happens at the time of purchase. But even if you run a brick-and-mortar business, it’s a good idea to accept credit and debit card payments as a convenience to your customers. If you run an e-commerce store or sell services online, you’ll need some form of digital payment processing. The number of online shoppers has been growing steadily since 2014, rising from 1.32 billion digital shoppers in 2014 to 2.14 billion in 2021. Cash transactions only accounted for 19% of all payments in the study.Īlthough the global COVID-19 pandemic undoubtedly accelerated the use of credit and debit cards as more people shopped online, the trend may very well continue. Likewise, the Federal Reserve Diary of Consumer Payment choice showed that credit card payments represented 27% of all transactions in 2020, while debit cards accounted for another 28%. Statistica shows that Apple Pay users worldwide grew from 67 million users in September 2016 to 507 million in September 2020, jumping by 65 million people between September 2019 and September 2020, alone. The rate of credit card and mobile wallet transactions (such as Apple Pay) continues to increase.
Credit card processing how to#
How important are credit card sales to your company’s growth? Our credit card processing guide will help you understand how to accept credit cards and what to look for in a credit card processor. Research your options to get the best deal for you and your customers. Accepting credit and debit payments comes with a cost, but it’s most likely a cost you can’t afford to skip.
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