How to Use a Credit Card System
Open a merchant account., Set up a point of sale (POS) system., Set up a mobile credit card processing system., Set up an online credit card system for e-commerce.
Step-by-Step Guide
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Step 1: Open a merchant account.
A merchant account is a bank account, but it is different from a business checking account.
A merchant account communicates with your customers’ credit card issuers.
It takes the customer’s credit card information and verifies and approves the sale.
Your merchant account communicates with the card issuer to authenticate the user, confirming that the card is not stolen and that the customer has enough of a balance to pay for the sale.
If the sale is approved, the merchant account deposits the funds into your business checking account.If you already have a business checking account, you can likely get a merchant account with that bank.
You will need to provide financial information about your business, including financial statements and tax returns. -
Step 2: Set up a point of sale (POS) system.
A POS system is what you would find in a traditional, physical retail setting where you would accept payment in person.
Lease or purchase a credit card terminal and install credit processing software.
The system reads the customer’s credit card and processes the credit card payments.
It communicates with your merchant account and the customer’s card issuer to authorize the purchase.
You can connect the terminal to your router, cable modem or DSL line.
Different models come with barcode readers, PIN pads and printers, depending on your needs.The bank through which you obtained your merchant account provides you with this equipment.
Choose a model that is compatible with chip-enabled cards.
In the past, credit cards always had a magnetic strip which you would swipe through your credit card terminal.
New fraud-protection technology equips credit cards with electronic chips., This type of system allows you to accept credit card payments from multiple locations using your smartphone or tablet.
Businesses who might choose this solution include street vendors, delivery services, or repair technicians.
Also, a retailers in brick-and-mortar stores might use a mobile system if they want to be able to accept payment in multiple locations in the store.Download a mobile credit card processing app.
Using your smartphone or tablet, download an app such as Square, PayPal Here, or Flint.
Choose a version of the app that is compatible with your device.
Once you have the app, visit the website of the payment processor’s website.
Create an account for your business.
You will have to provide your bank account number so payments can be deposited into your account.
Get a card reader.
The card reader plugs into the headphone jack on your mobile device.
It will be provided to you for free from the payment processor once you sign up.
Card readers can also be purchased in drug stores like Walgreens and RiteAid.
If you already purchased one, the payment processor company will issue you a credit to reimburse you. , Obtain shopping cart software and open either a merchant account or a payment gateway account.
Shopping cart software consists of many components that connect with a web host, provide tools for setting up your product pages, add a shopping cart, calculate shipping, and taxes and process payments.
A merchant account or payment gateway account communicates with your shopping cart software, the customer’s credit card issuer, and your bank account.Hosted shopping cart software is user-friendly and doesn’t require much technical expertise.
You have to pay for a monthly subscription, but it is the most cost-effective solution for small businesses.
Popular providers include Shopify and Bigcommerce.Self-hosted open source shopping carts are best for big companies who need to customize their e-commerce platform.
You have to install them and get web hosting services separately.
The programs are usually free, but it can be expensive to pay for the services of someone with the technical expertise to use them.
Popular providers include Magento and OpenCart.If you already have a brick-and-mortar store and are setting up an online shopping site, you likely already have a merchant account.
Work with your merchant account to set up online credit card payment processing.
If you don’t already have a merchant account, sign up for an online payment gateway.
An online payment gateway processes your customers’ credit card authorizations.
Popular payment gateway providers include PayPal, Authorize.net, and Stripe. -
Step 3: Set up a mobile credit card processing system.
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Step 4: Set up an online credit card system for e-commerce.
Detailed Guide
A merchant account is a bank account, but it is different from a business checking account.
A merchant account communicates with your customers’ credit card issuers.
It takes the customer’s credit card information and verifies and approves the sale.
Your merchant account communicates with the card issuer to authenticate the user, confirming that the card is not stolen and that the customer has enough of a balance to pay for the sale.
If the sale is approved, the merchant account deposits the funds into your business checking account.If you already have a business checking account, you can likely get a merchant account with that bank.
You will need to provide financial information about your business, including financial statements and tax returns.
A POS system is what you would find in a traditional, physical retail setting where you would accept payment in person.
Lease or purchase a credit card terminal and install credit processing software.
The system reads the customer’s credit card and processes the credit card payments.
It communicates with your merchant account and the customer’s card issuer to authorize the purchase.
You can connect the terminal to your router, cable modem or DSL line.
Different models come with barcode readers, PIN pads and printers, depending on your needs.The bank through which you obtained your merchant account provides you with this equipment.
Choose a model that is compatible with chip-enabled cards.
In the past, credit cards always had a magnetic strip which you would swipe through your credit card terminal.
New fraud-protection technology equips credit cards with electronic chips., This type of system allows you to accept credit card payments from multiple locations using your smartphone or tablet.
Businesses who might choose this solution include street vendors, delivery services, or repair technicians.
Also, a retailers in brick-and-mortar stores might use a mobile system if they want to be able to accept payment in multiple locations in the store.Download a mobile credit card processing app.
Using your smartphone or tablet, download an app such as Square, PayPal Here, or Flint.
Choose a version of the app that is compatible with your device.
Once you have the app, visit the website of the payment processor’s website.
Create an account for your business.
You will have to provide your bank account number so payments can be deposited into your account.
Get a card reader.
The card reader plugs into the headphone jack on your mobile device.
It will be provided to you for free from the payment processor once you sign up.
Card readers can also be purchased in drug stores like Walgreens and RiteAid.
If you already purchased one, the payment processor company will issue you a credit to reimburse you. , Obtain shopping cart software and open either a merchant account or a payment gateway account.
Shopping cart software consists of many components that connect with a web host, provide tools for setting up your product pages, add a shopping cart, calculate shipping, and taxes and process payments.
A merchant account or payment gateway account communicates with your shopping cart software, the customer’s credit card issuer, and your bank account.Hosted shopping cart software is user-friendly and doesn’t require much technical expertise.
You have to pay for a monthly subscription, but it is the most cost-effective solution for small businesses.
Popular providers include Shopify and Bigcommerce.Self-hosted open source shopping carts are best for big companies who need to customize their e-commerce platform.
You have to install them and get web hosting services separately.
The programs are usually free, but it can be expensive to pay for the services of someone with the technical expertise to use them.
Popular providers include Magento and OpenCart.If you already have a brick-and-mortar store and are setting up an online shopping site, you likely already have a merchant account.
Work with your merchant account to set up online credit card payment processing.
If you don’t already have a merchant account, sign up for an online payment gateway.
An online payment gateway processes your customers’ credit card authorizations.
Popular payment gateway providers include PayPal, Authorize.net, and Stripe.
About the Author
Anna James
A passionate writer with expertise in practical skills topics. Loves sharing practical knowledge.
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