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by Peter Daisyme
July 23, 2018
by Peter Daisyme
July 23, 2018
jarmoluk / Pixabay
If you hope to be competitive in the current marketplace, you have no choice but to start accepting credit card payments. However, many small businesses aren’t as prepared as they ought to be in order to manage this function.
Is that your situation? Not only do credit card transactions cost you money, but they can expose you to dangerous security risks that may compromise your company’s operations and stability.
But if you know how to accept credit card payments in a safe and efficient manner, that will go a long way toward establishing your firm as a successful player in your industry.
As you probably know from personal experience, credit is a more common method of payment than cash. As cash has become less of a feature in point-of-sale (POS) transactions, fewer and fewer merchants choose to operate on a cash-only basis.
Though cash is handy in the sense that it doesn’t involve any fees and the transaction is complete as soon as the money trades hands, it’s cumbersome in a number of other respects. Cash has to be protected and stored and requires regular trips to the bank.
Cash also requires exact change, which means either the buyer or seller has to have the right bills and coins on hand to make the transaction balance. It’s harder to trace, which can be a challenge when it comes to accounting (especially if discrepancies occur).
Despite entailing processing fees, credit transactions are more efficient and flexible. They offer merchants — both the online and brick-and-mortar variety — a number of tangible benefits, such as:
This isn’t to say credit cards are a perfect solution. As with any payment method, there are some potential disadvantages and risks; for example:
The pros of accepting credit cards typically outweigh the risks, but your company needs to understand what it’s getting into. In order to stay safe and secure, you’ll have to be extra vigilant about how you proceed.
It’s not as simple as deciding you will accept credit card payments, period. There are a number of different ways to accept payments, and you’ll have to select the option that’s suitable for you.
Regardless of how you accept credit card payments, you need to make sure you’re doing so safely, securely, and efficiently. There’s an art to doing this well. Check out a few tips and best practices:
There are lots of different POS systems and equipment on the market. You need to be extra cautious when you select products and services. Make sure you’re using only PCI-compliant hardware and software.
In addition to PCI compliance, you also want to read reviews and do proper due diligence to ascertain which options have been tested and approved by users.
One of the biggest problems businesses have encountered recently is getting caught storing customer payment card data. Although there’s nothing technically wrong with the practice, it makes you extremely vulnerable.
“When you hold on to cardholder data, whether from an individual or another business, you run the risk of that information being seen by people who shouldn’t have access to it,” Staples Business Hub explains. “That’s one reason why it’s preferable to securely dispose of any payment information immediately following a transaction.”
This is one of the first things you have to address. The longer you wait before settling this issue, the greater the risk you’re apt to face. Unlike some of the other mistakes that you could make with credit card processing, this one has the potential to shut down your business.
It’s not enough to select the best software/equipment and avoid storing payment card data. You can have a perfect strategy in place from an executive leadership perspective, but it will all be worthless if your employees — the ones who will handle the cards and transactions — aren’t versed in what to do.
One of the best ways to reduce the risk of card fraud is to implement an employee policy for proper handling of customer credit card data. More specifically, each individual employee should be given his or her own unique pin code to track sales and transactions.
In addition to creating another layer of security, this imposes an added measure of accountability.
You should take particular steps when processing a card-not-present transaction. This will ensure the individual who makes the purchase is actually the authorized user. One of the best is to verify the billing address for the card. If the billing address doesn’t match the shipping address, you might want to follow up with the purchaser for an explanation.
“With purchases made online, the retailer is 100 percent liable for fraudulent purchases,” says Don Bush, VP of marketing for Kount, a fraud prevention and risk management technology provider.
“Neither the bank that approved the transaction nor the payment processing service that reviewed the transaction are held responsible for fraudulent purchases. It’s all on the merchant. That means if your company accepts a bad or stolen credit or debit card, the total liability of the loss is yours.”
In other words, you have little choice but to be extra cautious with online purchases. If you ever have doubts, it’s best to ask for another form of payment or deny the purchase altogether.
We operate in a business universe where credit is the norm. If you aren’t accepting credit card payments, you’re inarguably falling behind.
Just make sure you prioritize security and efficiency as you transition. If you do, you’ll establish a solid foundation for sustainable business growth.