Payment Processing Software

Payment Processing Software Overview

These days credit cards are the most popular payment method and they are essential to payment operations. Globally, consumers want user-friendly, flexible processes that include use of mobile devices to make payments. Companies reach customers where they live, on their phones, to increase sales and use of services.

Many of these mobile payment software products employ the same processing methods as traditional major credit card companies. Most credit card processing services did not anticipate this trend or the resulting chaos. Consumers are not inclined to navigate a confusing system and don’t appreciate surprise limitations and fees.

Small businesses are severely impacted, particularly start-ups. A lack of knowledge about credit card processing software may lead to making poor and costly decisions. Small business owners need to form reliable, trustworthy partnerships. Fortunately, loyal, professional companies are here to help build your business and prosper.

Understanding Payment Processing Software

The best payment processors offer transparency, owners also appreciate the premium customer services and straightforward fee policies. Companies service enthusiastic “e-tailers” and traditional brick and mortar operators.

Systems are now available for POS (Point of Sale) transactions, one of which is Square Point Of Sale. Another is Helcim, which focuses on subscription services. Premier retailer Sam’s Club has also weighed in.

Do not underestimate the act of accepting credit card payment and actually getting paid. A lot goes into the process, make sure your system can handle any complications. This means being aware of the many steps involved and adept at smoothly handling each phase.

Your software must handle the large number of sales on mobile devices, bridge the gap between services you provide and the payments that increase your bottom line. This review will not quote figures or contract terms as they definitely vary dependent on many factors.

This article guide trusted credit card processors, experts at CardFellow and FreedomPay were consulted. The processing companies were interviewed to enlighten buyers with real life demonstrations and fee information.

The ten software companies include the three listed above (Helcim, Sam’s Club and Square POS) and Flagship Merchant Services, Payline Data, Cayan, Payment Depot, Intuit QuickBooks Payments, CreditCardProcessing.com, and National Bankcard.

Initial Costs and Equipment

Today’s payment facilitators compose a unique group of providers. Credit card companies are the top of the spectrum, they charge a flat fee rate for larger corporations like First Data, Flagship, Vantiv and Global Payments.

Each entity clears credit card payments. Several contracts with individuals and all of them work with intermediaries such as Independent Sales Organizations (ISOs) that are registered with a bank. The majority of services covered in this article are ISOs, examples are Sam’s Club Merchant Services, Cayan, and National Bank Card.

Intuit QuickBooks and Square POS are designated merchant services aggregators. A sub-account is set up within established master merchant accounts.

Business owners are the main users of payment processing software. Generally, they are subject to as many as three sets of fees: credit card company interchange fees, intermediary and processor transaction charges. There are a choice of pricing structures available to businesses based on monthly transactions, total amount of credit card payments and average sale amounts.

For example, the contrast between a store that sells big ticket items and that of a small coffee shop’s revenue demonstrates the need for different systems.

Credit card processing companies have extensive systems in place to handle major cards like Visa, American Express, Discover and MasterCard. They also fully service Android Pay, PayPal and Apple Pay. These are the most recognized mobile and digital payment models, however, new technological developments means the future will include cryptocurrency payment options. Cryptocurrency systems will impact retail and micropayments.

Additionally, more attention will focus on equipment for users who aren’t cloud-based. These include POS system terminals, mobile device credit card and swipe/dip card readers, tablets, and virtual terminals, all designed to accommodate e-commerce.

As previously mentioned, credit card companies determine interchange fees and every processor is charged the same amount. Corporate cards and rewards cards are in another class and pay higher fees.

Chargeback fees are unavoidable and also assessed differently by individual companies. When possibly fraudulent charges appear, processors manually review the payment in question and settle disputes between credit companies and merchants. Processor profit derives from fee markups or minimal transaction costs combined with a subscription fee.

Payment Processing Software Pricing

All service providers don’t initially disclose every additional charge, this is a lucrative component for profit. Cardfellow is a website for quote generation and reviews of credit card processing offerings. Staff there advise businesses to avoid bundled pricing because of the qualified and non-qualified rates that are offered. Confusion often results regarding prices for various transactions and the actual charge may not be clearly articulated.

It is your responsibility to review the merchant agreement carefully. Make sure you check for hidden fees and particularly cancellation fees. In the past, standard contracts.usually covered 3-years and automatically renewed at the end of that period. Currently, the payment processors are adapting new policies. It might be wise to ask for an amendment or a specific waiver in regard to cancellation charges. No one should be blind-sided.

Do diligent research for providers that use wholesale rates, Payment Depot is one to explore. This company charges a monthly subscription and minimal transaction fees. The merchant’s interchange fee is not marked up because this method balances losses.

You can estimate the price using your total number of monthly transactions to decide which is the best plan for your business. This assures that you will not guesstimate too low or two high.

Another factor is the average amount of your sales each month. It’s essential to receive a contract that lists all fee charges. Per this agreement the processors should not be allowed to change fee amounts or institute and collect new fees.

A good business practice is to purchase the payment processing equipment your business will need. In fact, most of the companies discussed in this article directly sell their equipment or maintain agreements with hardware suppliers. Beware of “free equipment” sales talk, the fact is you may sign up for an expensive lease program.

Partnership bundles are a great option, a few hundred dollars will get you started with the basics. The price increases if you want the latest technology such as a POS system that interacts with cloud apps, supply chain and accounting issues.

Support and Compliance in the Payment Card Industry

Reputable providers incorporate the Payment Card Industry Data Security Standard (PCI DSS) for merchants with services. This is not a federal government requirement, the regulations are overseen by a private organization that is self-funded.

Some of the PCI DSS rules are difficult to navigate if your business is a small enterprise and/or fairly new. Processors aren’t really involved in any of the rules, but still may charge compliance fees that start at $20 and may cost up to hundreds of dollars.

This is where a merchant services aggregator like Square Point makes sense. The sub-merchant account model means compliance costs are included in the company’s Merchant Account maintenance.

The processors discussed here mostly offer 24/7 technical support. Ideally you should also have a specific account manager assigned to your business when you sign the contract. Another consideration are firms like ControlScan and TrustWave if you don’t have tech support on site for your payment operations or your provider.

Do a little investigation, place an after-hours call to the processor. This is a way to see how these calls are handled. Is there an annoying wait time or are these calls answered efficiently by knowledgeable staff?

Also verify whether support contact information is clearly visible on the website. A complicated and repetitive phone menu is another red flag. The importance of learning as much as you can about who you are doing business with can not be emphasized enough.

Types of Buyers

If you have a typical business, your customers can shop in store or online, secure in the knowledge that your inventory is the same in both locations. The e-commerce payment process discussed above operates smoothly with most businesses that feature an online component. You will acquire online processing of payments and a system for return items.

Other Types of Businesses that Use Payment Processing Software

• E-Commerce Businesses: Businesses that are fully ecommerce also require payment processing. Online software connects the merchant account to payment collection and transaction processing. In-store POS is not needed to handle credit cards purchases.

• Subscription Economy Businesses: This is a new trend, two examples are Blue Apron and Netflix. Membership and scheduled subscription fees define this business model. Most of these are e-businesses that do not have a physical site. The goal is to cultivate brand recognition and maintain loyal, satisfied consumers.

Purchase Considerations

Retail shops must have POS system software to operate. The programs focus on customer experience, sales, inventory and accounting. For help with implementation, download our POS checklist.

Development of an online business: once the physical store is established and the POS system is in place, focus on your online presence. Align your ecommerce strategy with the POS platform.

Retail technology disruption: Uber, Instacart and Stich Fix all use subscription-based, on-demand service and support business models. These businesses reflect the change in consumer expectations in regard to buying experiences. Each of these companies, and others that use this model are considered disruptive because of game-changing practices that focus on consumer relations, brand loyalty, superior service and personal service.