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payment processing for small business

3 Myths About Credit Card Processing for Small Business

Brant Schelhaas

When you’re running a small business, you have a ton on your plate: coordinating employees, managing inventory, running marketing campaigns, keeping tabs on your accounting…and the list goes on. Understanding the complex world of payments processing shouldn’t keep you up at night. Read on for three myths about credit card processing for small business that we’ve debunked for you.

Myth #1: I don’t need to worry about PCI compliance.

False—all organizations that receive, transmit or store sensitive cardholder data are responsible for keeping their business and all systems in compliance with the Payment Card Industry (PCI) guidelines. Fail to do so, and your business leaves itself open to a data breach, hefty fines and loss of consumer confidence. Whether you process two credit card payments each month or two thousand transactions, it’s your responsibility to achieve and maintain compliance at all times.

Your payments processor is your partner in helping you reach PCI compliance. Processors have years of experience in the payments industry and can help you understand what your business needs to do to be compliant. For more helpful information on securing your business and staying up to code with PCI compliance, check out these merchant resources published by the PCI Security Standards Council.

Myth #2: I’ll never understand processing rates and fee structures.

False—you should understand the rates and fees your payments processor is charging you to run transactions for you. Billing statements can be complicated, but you should understand what each line item is for and why you’re being charged. Here are some common fee types that you or may not be charged depending on your processor and your contract:

  • Setup: Some processors charge a fee for setup and installation of your payment processing systems, hardware and software. Others may waive this fee as part of a special offer or based on the fact that they anticipate you processing a minimum amount with them over a period of time, for example.

  • Per-transaction: Some processors charge a flat per-transaction fee, which may be a few cents or a set percentage of the transaction.

  • Interchange: Interchange is a fee incurred by the banks involved in the transaction, which your processor may pass through as your responsibility. Learn more about interchange from the Electronic Payments Coalition.

  • Flat monthly: Sometimes, you may be charged a flat monthly fee instead of a per-transaction fee—or you may be charged a combination of both. This flat monthly fee can vary widely based on your processing volume, your industry, the types of transactions you process and other factors.

  • Early termination: Make sure you find out before sign your contract with your payments processor whether you will be bound to process with them for a set period of time and, if you need to back out, if and how much you’ll be charged.

Myth #3: I spend money on processing each month, but it can’t help me grow my business.

False—your payments processing systems should help you grow your business. Each time you accept a credit card payment, you have the opportunity to collect valuable data about your customers, including their email address, mobile phone number, spending habits and preferred method of payment. Use this data to inform your future marketing campaigns and to build a rich customer database. What’s more, accepting credit card payments and other electronic payment types will help you grow your business because you will attract a wider range of customers and attract new customers who prefer to pay with these payment methods.

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