Ahh, credit and debit cards. They’re a business owner’s best friend and worst enemy. Customers expect to be able to use them in your store, and so they should. But the systems for processing them can be downright confusing and, sometimes, pretty expensive.
Never fear, Smartpay is here. And we’re about to give you a helpful rundown on how credit card processing works. Got these questions? We have the answers:
Credit card processing is the method of transferring money from a customer to your business, via a credit card. Once a customer scans or taps their card, banks and merchant service providers come into play, as do trusty card schemes like Visa and Mastercard.
We get it. When you’re running a business, you already have enough to worry about. And it’s easy to lose track of credit card processing costs. But before you know it, you’ll be whacked with a bunch of hidden fees that can take a toll on your bottom line. So, learning the basics of credit card processing means no more hidden surprises and a better handle on your finances.
As detailed as that sounds, credit card processing takes place in a matter of seconds. And from there, the processing of large groups of payments into the business’s merchant account will subsequently occur, usually within a few days.
Not to worry. With the proper safeguards in place, credit card processing is secure. But because credit card transactions are always a ripe target for fraud, you need to take some necessary steps to protect your business and your customers.
Most importantly, your business’ payment processing should comply with the Payment Card Industry Data Security Standard (PCI DSS), a series of regulations developed by large card schemes, including Mastercard and Visa. These regulations are especially vital for businesses that store customer card data in any way. You can find PCI DSS merchant resources here.
The good news is that for most business owners, your EFTPOS system will do most of the heavy lifting in the security department. For example, the EFTPOS system features a stack of features, including the tokenisation of payment data. This ensures transaction details aren’t shared with third parties.
Still worried about your business’ payment security? Accept mobile payments like Apple Pay and Google Pay. These extra-safe payment processes give you even more security features like biometrics. Also, having up-to-date terminal software means your system is staying on top of the latest threats.
You can read more about the reliability of EFTPOS and the security features we pack into Smartpay terminals here.
Debit cards work a little differently from credit cards. So, while a credit card lets customers access funds via a continuous line of credit, a debit card means they’re using their own money they already have in the bank.
Because debit cards present little risk, banks pre-authorise their use. And your business is the big winner here, because it means a much simpler and faster payment process, with typically lower fees.
Let’s get down to brass tacks. If you own a business, credit card processing costs are going to pile up fast. These fees fall into three categories:
But wait, there’s more. Different types of cards carry different kinds of fees. So, certain premium reward cards require higher interchange fees to cover the costs of bonuses (like rewards points and flights). Meanwhile, American Express and Diners Club cards all have boosted scheme fees.
The Reserve Bank of Australia has found that on average, American Express cards attract total merchant fees equal to 1.7% of the transaction value. Mastercard and Visa cards attract merchant fees equal to 0.9% of the transaction, on average.
For comparison, Mastercard and Visa debit card transactions carry average merchant fees of just 0.5%.
As the business owner, credit card processing fees are often yours to pay. And whether they come from card services or payment facilitators, you’ll have to wear them.
Thankfully, you’re able to pass credit card fees onto your customers. And it’s done with something called a ‘surcharge’. These small, additional fees can be levied on credit or debit card payments.
But before you go passing on the fees, you need to get up to speed on the latest rules regarding card surcharges on the Australian Competition and Consumer Commission website. Some of the most important regulations for Visa, Mastercard and EFTPOS payments include:
Want a fuss-free way to wipe out merchant service fees? Smartpay’s Zero Cost™ EFTPOS is the way to go. Smartpay Zero Cost™ EFTPOS lets you pass your credit card processing costs onto your customer with ease. You’ll get the surcharge calculated automatically, and can even customise when to apply them and to which cards. Magnifique!
Find out more about Smartpay’s Zero Cost™ EFTPOS here. Or, if you’d rather avoid surcharging, check out Smartpay’s Simple Flat Rate plan.
The good news: there are loads of options when it comes to accepting credit cards for your business. The even better news: Smartpay offers a simpler, mobile and intuitive credit card reader.
Our mobile credit card reader accepts all major credit card types (including Apple Pay and Google Pay). Plus, it’s easy to use with a speedy setup and a bevy of security features for your peace of mind.
What’s more, our Smartpay Zero Cost™ EFTPOS and Simple Flat Rate plans take the guesswork out of credit card processing fees that small businesses usually struggle with.
Find out if Smartpay’s credit card reader is right for your business today.
Our team of Payment Specialists can help you discover what’s best for your business. To discuss how surcharging works and our flat rate plans, contact the team at Smartpay.
or Contact Sales on 1800 574 999
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