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How should my business process card payments?

  • Blog
  • 21 November 2017

When you’re looking to provide card payment facilities in your business, you have to consider how to do  it most effectively. From many different models of payment terminals, to the way you pay fees on the transactions, everything can change depending on what works best for you.

To help you understand it all a little better, we’ve put together this suggested guide on how you could process your card payments.

How should my business process card payments?

What options are available?

When you create your merchant account with a card payment provider, there will be two main ways that you can process your payments.

The first will be as a single flat monthly fee, alongside a percentage of each payment, while the second will be a ‘pay as you go’ method, with a flat fee per transaction also alongside a percentage of each payment.

If you choose to go for the pay as you go model, the percentage you’ll pay per transaction ranges from 1.1% to 2.5% of the transaction value.

Depending on the kind of business you are, you might also provide the option of paying by card online through a payment gateway. Payment gateways are essentially virtual card payment terminals, hosted by a bank or external provider. Online card processing has its own costs associated, but it works much the same as a regular terminal, with a percentage of the sale being taken as a fee.

What about the other costs?

While the payment processing itself has associated costs, there are also other costs that you’ll need to consider when making the decision on how to process card payments.

For example, the costs of terminal rental will vary depending on the functions you’re looking for in the terminal. Mobile card payment terminals, which include their own SIM, so you can facilitate payment all across the country, will cost a little more, as will terminals that offer contactless payment functionality.

For a look into what sort of costs are associated with providing card payments, take a look at our blog post of how much does it cost to provide card payments in my business?

Which way should I process my payments?

Your choice should be influenced by several considerations:

  • What you need to provide as a bare minimum to take card payments from your customers
  • What can you do to improve the experience for customers, such as using more responsive terminals with contactless technology
  • What kind of business are you?
  • How many card payments will you take a month?

For example, if you’re a food delivery service, you’ll likely benefit the most from providing online payments, so that the sale is confirmed and you can be sure the money is secure before delivery.

If you’re a very busy shop with a large amount of monthly sales, your best bet will likely be renting a contactless terminal, so that you can process a lot of payments more quickly, while opting for the monthly and percentage fee, rather than the per transaction and percentage. The large amount of payments mean that you’ll pay less overall and that your provider may be willing to negotiate with you for a lower price, saving you even more.