By: Javi Calderon
on Thursday, November 04, 2010
Payment Processing Software vs Credit Card Terminals: What’s Right for your Business?
The world of payment processing can be a dark and confusing place. I’m not being facetious. A small business owner already has to be a modern-day Renaissance man (or woman): they have to know some finance, marketing, psychology, communications; even how to do some minor repair work! Not to mention they have to know an awful lot about their products and industry. Knowing what format of credit card processing would best fit their business is one of those things that probably goes unnoticed by the average small business owner.
The answer boils down to three simple questions:
1. What kind of products or services do you offer?
2. Will you have easy access to a computer when it comes time to charge a customer?
3. Have you already purchased cash registers or other equipment?
Obviously, the style of business that you operate will lend itself to a particular format of payment. If you’re offering ballet lessons, guitar lessons or karate classes it would be kind of silly to own a cash register and a credit card terminal, right?
Do you meet your customers face-to-face? Do you provide regular services to customers that you need to charge monthly or weekly? Analyze your needs and the needs of your customers, figure out which format would be easiest for both parties and go from there.
If you’ve already invested in a cash register or some other point of sale system then you should probably just go with a credit card terminal or a credit card machine to avoid cluttering your counter. Unfortunately, while some cash registers can be made to integrate with payment processing software most can’t and you’ll end up with more headaches than transactions. If your business keeps you away from the desk and computer then having a portable credit card terminal will probably be more beneficial as well.
If you own some sort of retail business then installing payment processing software on your computer system will offer many benefits. Software will allow the cashier to quickly enter information, look back on previous transactions and even track customers. Software will also come with great reporting tools for compiling and analyzing your sales data.
If you want to accept credit card payments over the internet then you should invest in an online payment gateway. Unless you have a business that can really, truly only be local (like a lawn care service or pool cleaning service) then having the ability to sell your products online can exponentially expand your business. Think about it, people from California to Florida to New York will be able to find and buy your products from the comfort of their homes 24/7!
Choosing a payment gateway, again, depends on your needs. Some charge an upfront fee; others have no fee to open an account, but both will charge you per transaction. Just because one company doesn’t charge an upfront fee doesn’t necessarily mean it will be cheaper. Remember, they have to make money somehow, so the service will probably come with a higher charge per transaction and other costly fees.
Some companies offer better rates depending on your circumstance. For example, if you will only have one transaction being handled at a time you might be better off with one company, but if you will have many transactions occurring simultaneously a different service provider might be a better choice. My point is that you should always do your research and ask a sales representative questions before you make a purchase.
Having the right payment processing system in place will ensure efficient transactions and happy customers. Having the wrong system will cause delays at check out, slow down your business, and definitely cost you money. Do your research and get to selling!
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