- The 5 rules of effective outdoor advertising
- How geeks rediscovered old-school board games
- Supercharge Your Sales: 5 Elements of a Landing Page That Converts like It’s Nobody’s Business
- Introducing Wix Answers: a new customer support solution
- FAMILYTIME PARENTAL CONTROL APP – TOOL FOR NON-TECHY PARENTS TO MONITOR THEIR KIDS’ DIGITAL ACTIVITIES!
Most new startup or small business owners have a single pressing question that needs to be answered, and that is, “How do I start accepting payments?” By the time you’ve chosen a business structure, named your business, gotten incorporated, obtained your tax IDs, rented your storefront, and purchased your inventory, you need to be ready to accept that first dollar – and all the other dollars to come. Here’s what you need to know.
Set Up Your Business Bank Accounts So You Can Accept Checks
Before you can start accepting payments, you need to set up a business bank account, especially if your business name is different from your personal name. Doing so will make it easier to accept payments, including payments like checks that have to be made out to a specific payee. If you’re doing business under your own name, as a sole proprietor, for example, you could just have customers make out checks to you personally and deposit them in your personal account. But if you’re operating under a business name, you’ll need a bank account in that name into which you can deposit checks made out to the business.
It’s true that checks aren’t as popular a payment method as they used to be. If you’re running a retail outfit, for example, you probably won’t get many customers asking to pay by check. But while most consumers no longer prefer checks to make small purchases, the Federal Reserve reports that 1.27 billion checks worth more than $2 billion were written in the final quarter of 2017 alone. People still like to write checks for large purchases, and if you’ll be working with corporate clients, they will most likely want to pay you with a paper check, or at the very least, a direct deposit.
Choose a Merchant Services Provider
Your bank may provide credit card processing services, but you may want to look into going with a merchant services provider instead, because you’ll get much more for your money. A merchant services provider can set you up with the equipment, software, and online portals you need to accept payments of all kinds, not just credit cards. A merchant services provider can give you access to point-of-sale (POS) terminals, payment gateways, accounting software that automatically keeps track of electronic payments received, security and compliance tools, and tools for accepting contactless, mobile, and online payments.
The rate you pay for merchant services will depend on your transaction volumes and yearly revenue. Typically, you’ll pay a percentage of each transaction to cover processing fees and other costs. Shop around for the best rates, and be wary of providers who impose hold times between processing payments and making the money available to you in your account. This isn’t necessarily a bad thing; many providers use this float time to earn some extra interest on the money before handing it over. But, it could affect your cash flow. If you need the cash from your payments ASAP, go with a provider who makes payments available immediately after processing.
Implement Fraud Protections
Credit cards are one of the safest payment methods available, but that doesn’t mean fraud isn’t a risk. Most merchant services providers will include secure encryption for transaction data, and if they don’t, choose another provider. This is especially important for online payment portals, not only because of the risk of fraud, but because seeing a secure, encrypted connection makes customers feel safe about keying in their credit card details.
Ask your merchant services provider if they use the Address Verification System (AVS) or LinkPoint Secure Payment Gateway. Require card validation using MasterCard’s card verification value (CVV2) or Visa’s card validation code 2 (CVC2). In-store, be vigilant against credit card fraud; check customer IDs, inspect cards for signs of damage, capture signatures, and make sure you’re set up to accept EMV cards.
If you’re a new business owner, you need to be prepared to accept payments of all kinds. The worst thing you can do is say “Cash only,” because more and more customers these days prefer the convenience and security of debit or credit cards, mobile payment apps, and other payment methods. Set yourself up to accept cards, checks, online payments, and mobile payments, and watch the profits roll in.