A credit card is a card distributed by financial companies. This piece of plastic card helps users to get funds from the bank without withdrawing any amount of money. For this reason, many people own credit cards. In fact, most of them hold three credit cards from three big credit card processing services.
Due to the increasing demands of this payment option, businesses use credit card machines to help buyers pay their bills. They just need to give it to the cashier, swipe it on the device, and leave the store.
There are different methods of payment processing. All of them are offered by the best credit card processing services. Nonetheless, the most popular method is the traditional credit card processing system. This method uses a POS machine where clerks swipe the card to get the customer’s payment.
However, POS machines are getting more and more expensive. Start-up businesses can’t afford to buy this computer as it is expensive. For this reason, some shops use mobile credit card processing services. This process allows their company to be more accessible. It uses a smartphone or tablet to make a transaction.
Apart from that, there are other differences between these two systems. In this article, we will discuss what makes them unique from one another. But first, you need to learn what credit card processing is, and why you should use it for your business.
The Meaning of Credit Card Processing
Credit card processing refers to any electronic payment transaction. Those who provide this service are the credit card processing services. Their purpose is to make the payment credit card transaction easy.
Credit card processing has six phases. To start the activity, the credit card holder should make a purchase. After that, they need to enter the credit card number or swipe it on the machine. After entering the number or swiping the card, the information goes into the system and delivers it to the processor.
After receiving the necessary details, the processing company sends a request to the consumer’s financial firm. The bank checks their client’s account to see if he has enough funds to pay the bills. After checking the account, the financial firm tells the processor if it’s a go or a no.
After that, the processing company displays the bank’s answer. If it’s a yes, the transaction is complete. However, if it’s a no, the merchant informs the cardholder that the machine rejects the action.
Why Should Business Owners Use It?
There are several reasons for this. For one, merchant processing services help build trust. Trust is a significant aspect of any business. If a company is trustworthy, chances are consumers will visit your store whenever they need to buy something.
Another reason is adaptability. If a company has credit card processing machines, more and more people will go to your company.
Lastly, it helps people save time. Many people are always in a rush. In fact, most of us have a little time for ourselves and even for our family. With the use of credit card processing platforms, they can shop and pay their orders and be on time with their schedule.
Comparing Mobile and Traditional Credit Card Processing
Though mobile and traditional credit card merchant services have similar purposes, these methods still have a lot of differences. You can find these variations in their locations and processes, benefits, and concerns. Let’s discuss each component and know how they are different from one another.
Location and Process
The typical credit card processing system needs a place where you can store the machine. Each terminal has access to the registrar’s desktop. The mobile payment processing service – on the other hand – lets you process a transaction wherever your smartphone is. However, it needs some equipment, such as swipe hardware or an app to transform it into a credit card processor. Nevertheless, it is the cheapest method out of all processing systems.
For mobile payment processing, you need to get a smartphone and a modern credit card terminal. These terminals are usually small, run on batteries, and are portable.
The process used by wireless credit card merchant services and the traditional credit card processing are quite similar. You need to swipe the credit card, present information and wait for permission. They also use the same authorization networks. Hence, from the perspective of the retailer and the buyer, their process is almost identical.
Benefits
Mobile processing uses the latest technologies to help users process their payment transactions anywhere. This method provides more advantages than conventional credit card processing. Some of these benefits are as follows:
- Mobile service processing enables you to accept cards at different markets and events. Hence, it helps increase sales.
- This method eliminates the use of checks while you are on-the-go. With just a swipe, you have already paid for the products or services that you get.
- Wireless processing allows you to sync multiple payment processing services to the same merchant account. With this processing method, your business can be in many places at the same time.
- When both systems are in use, it qualifies you for getting lower credit card processing fees.
- The process of transaction and approval is similar to traditional payment processing.
- Record-keeping is as easy as with conventional processing.
But the primary benefit of this service is convenience. With this method, you can process transactions anywhere you go.
Concerns
One of the primary concerns of both entrepreneurs and consumers is security. They feel like using smartphones is not as safe as traditional processing. However, you can remove their doubts in their minds. You just need to do the following tips:
- Get two smartphones – one for business transactions and another one for personal use.
- Activate the password lock on your phone.
- Install anti-virus software on your smartphone as it gets viruses too.
If you take these precautionary measures seriously, mobile processing can be as safe as conventional payment processing.
Apart from security, learning curves are another major issue. Most of us are comfortable with traditional payment processors. So when mobile processing arrived, many people were skeptical about it. They thought that it’s too hard to use.
It could be true; however, you can call the customer support if you need their help. After learning the basics, you can navigate the machine with ease.
Which One Is the Best Choice?
Both traditional and mobile payment processing services have its pros and cons. Thus, it’s quite hard to determine which method provides the best credit card processing services. However, there are things that you can do to get the right service. Here are some tips for selecting the right processing method.
The Cost
Credit card processing rates are a major factor when choosing the right merchant service. These methods don’t just ask you to pay for the equipment. You also need to pay for their services. Some of the major expenses that you must pay are the transaction fee and the address verification fee. Apart from that, you also have to pay for other services monthly.
Thus, you need to know how much they cost. You also need to know if there are hidden charges involved. That way, you wouldn’t be surprised by the amount of payment you have to pay.
Easy Account Setup
Setting up a merchant account should not be as hard as solving a complicated Math problem. It should be simple and fast too. Thus, you need to check the average rating of the payment processing provider. The best way to know their grades is by reading credit card processing service reviews.
Apart from that, you also need to consider the setup time. The average setup time is two days. Thus, you need to ask the service provider regarding this concern before you get their service. If they said they need more than 48 hours, then you should look for another processing service.
Customer Support
Whether you want to use a mobile or traditional merchant service, you should consider the reliability of their customer service. They should be friendly and are willing to give their help. Lastly, they should be open 24/7. That way, you can call them whenever you need their help.
Traditional and mobile processing systems are the most common payment methods used nowadays. Each method provides pros and cons. For instance, mobile processing is cheaper than conventional processing. It’s also more convenient than traditional payment system.
However, conventional processing is easier to use. Moreover, it has fewer security issues. Nevertheless, these problems can be solved with ease. Mobile processing users just need to take precautionary measures to ensure safety. Furthermore, they need to get the help of the provider’s customer support to learn the basics.
However, choosing the right merchant account provider is hard – but not anymore. There is now a website that provides honest reviews of credit card processing companies. The site that we are referring to is CrowdReviews. It ranks the most reliable payment processors on the market. With this website, you can find the best service that you can use for your business.
John Tovar
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