Let’s be honest. You probably didn’t become a small business owner because you love running credit cards.
If you are like most entrepreneurs, you think of payment processing as something you just have to do in order to live your passion.
As you know, making and selling original products or services would not be possible without payment service providers (PSPs).
We know that choosing a PSP can be complicated. That’s why this week, we’re here to demystify them for you.
When it comes to payment service providers, there are many options. Though they all have different features and prices, they share these things in common:
- They read card information to gain access to a consumer’s information.
- They electronically communicate with the consumer’s issuing bank (Chase, Capital One, etc.) and the credit card network (Visa, Mastercard, etc.)
- They determine if there are adequate funds to make a purchase.
- They initiate and settle the transaction, making sure funds travel from the bank to merchant.
This process requires:
- A card reader to take the initial information
- Financial licenses for exchanging money
- The right technology to execute these functions
But beyond that, how do you know which services are right for your business?
Let’s look at history to tell us:
Traditionally, small businesses and shops go through a broker to acquire a payment terminal, which is that little black box you’ve probably had to use at some point in your life (remember punching in the last four digits of the consumer’s card?)
This conventional method is now considered expensive and antiquated, thanks to companies like Stripe and Authorize.net that have stepped in to provide a cheaper, simpler alternative. These platforms are known as third-party payment gateway services, and they’ve made some cunning advances.
First, the technology encrypts payments and gains verification from banks from the get-go. This means that the payment is deemed legitimate before the transaction is even processed. This helps eliminate fraudulent payments and the refund fees associated with them, helping your merchant fees stay low (before, with the broker method, the third-party broker assumed this risk, which is why the fees were so high!).
Payment gateway services are also super easy to integrate into your business’s website, making online shopping a visually pleasant and streamlined experience.
This is important because, let’s face it – you can’t limit yourself to selling products in-person, and you won’t always be able to ensure a consumer’s card is present for every online payment.
But, there’s always more.
Though service fees for these third-party gateway services are usually predictable and low (around 2.9%), when your business begins to grow, it’s time to look for other options.
Technology has come a long way, and processing payments is now easier than ever. While you could stop at that, Bloomforth’s founder, Quy Vo, is passionate about making sure that small businesses get even more from their credit card merchant.
Bloomforth’s software takes the concept of the third-party gateway service and streamlines it to be even more seamless. With a Bloomforth subscription, merchants receive a card reader that works across all devices. That way, merchants are using the same platform for both online purchases and purchases across all of their brick-and-mortar locations.
This way, instead of juggling multiple statements, merchants see all of their transactions across all devices in one place.
(And because Bloomforth charges a monthly subscription fee, merchants have the flexibility to negotiate processing fees for credit card transactions.)
But wait, there’s even more.
As we mentioned in last week’s blog, Bloomforth offers additional features that minimize merchant’s administrative efforts. For example, the real-time inventory feature automatically updates product counts when something is sold and allows returns or exchanges across all devices. If customers lose their receipt, merchants can search them by name or card number, making the platform a win-win for both. Lastly, employee timesheets can be tracked, invoiced, and paid – all on the same platform.
We make your merchant service work for you.
From authorization to settlement, payment service providers provide an important service that helps make your dream a reality. It’s important to take the time to learn about how to make your point-of-sale system work for you – not the other way around.
Give us a call and let’s discuss how to streamline your payment systems and help you get the most out of your efforts.