Payment processing is one of the most important business tools for every company, as, without it, you’re not going to get paid. Whether someone wants to pay by debit card, credit card, or even by check, you’ll need a payment processing to make sure their money ends up in your hands. But payment processing does go deeper than that.
Here is everything you need to know about payment processing and why it’s an important business tool.
What Is Payment Processing?
Payment processing is the process of authorizing, authenticating, and then approving a transaction for a company. Once the transaction has been approved, the process to pull funds from someone’s credit or debit account will start. Every business plan should include the method that you’re going to take for payment processing.
This method only applies to credit or debit cards, which are still the two most popular methods of payment. Cash is still handled like cash, where someone needs to count it and deposit it into the cash register. And checks still go through the same verification purpose through the bank.
What Are the Methods of Payment Processing?
There are two main methods to start payment processing. The first is through merchant account providers. These providers give your company a unique identification number during the payment process, which is used as an authentication factor.
If you’re running a small business, the other method of using payment service providers is going to be cheaper. Everyone using the network shares the same merchant ID, making it cheaper for those that are just starting.
For those looking for payment processing, be sure to check out the link.
How About Digital Wallets?
Digital wallets are becoming the norm, as more people already have a smartphone or smartwatch on them to simply tap to the payment terminal to pay. Rather than relying on card strips or chips, the system instead relies on short-range radio waves that emit from both the terminal and the payer’s phone or watch.
Credit cards and debit cards are both even taking up this technology in the card itself. The best way to tell if your card offers contactless pay is to look for a WiFi symbol turned so that it is extending right rather than up.
This method of payment takes your card number and attaches a token to it. By doing this, you’re creating another level of security for the credit or debit card. Making it harder to trace back to the customer in the event that someone is able to access your data.
Payment Processing Is One of the Business Tools No One Can Skip Out On
Out of all the business tools out there, obtaining payment processing is going to be the one that ensures that you get paid – whether you’re selling jewelry at a stand or shipping thousands of pieces of clothing across the world.
If you want to learn more about more news that doesn’t always make the headlines, be sure to check out the rest of the blog. If you know someone interested in starting their own business, be sure to share this article with them.