There is an ocean of information available on the best professional credit card terminals. To help you avoid being lost at sea, here is a little information to guide you on your quest.
With the technology that exists today, there is really no reason for a business of any size to avoid taking credit or debit cards. Not only is the technology advanced and affordable, but your consumers are using credit and debit cards more than ever for their purchases.
Don’t Miss the Boat
80% of the population carries a credit and a debit card and those aren’t just for decoration. They plan to use them! Statistics show that consumers will typically buy more and tip better when they use a credit or debit card. It’s estimated that only 7 % of all transactions are done with cash. The decision is clear.
What Kind of Terminal Do You Need?
Choosing the type of terminal you need could very well be one of the easiest decisions you’ll make through this whole process. Why? There are really only three options. As you read through these options, one will most likely jump out to you as the right choice.
The Classic Terminal- These terminals are your standard, everyday retail credit card terminals that you’ve likely seen in shops and restaurants. They’re usually square or oblong, and feature a “swiper” that will read the magnetic strip on your customer’s credit card. When you use a terminal like this, your merchant service company will expect that nearly all of your transactions will occur with the customer being present at the time of sale. While you can always key in a credit card number without the physical card, there is usually a higher rate paid for that transaction. Some of the best retail credit card terminals have a printer built right into them, and still others have a separate printer. Whichever way you go will likely have minimal impact on your day to day business.
The Wireless Terminal- Have you ever been to a craft fair or a festival? All those vendors and food trucks probably have some version of a wireless terminal. Depending on your business model, a wireless device could be one of the best credit card terminals. These devices have a similar look and feel to the classic terminal, but with one major exception- Its wireless! You can take them virtually anywhere there is mobile phone service and they will work just fine for you. We already talked about businesses that travel to fairs, festivals, and food trucks, but there are so many more a wireless terminal could be ideal for. Any business with an outside sales force could consider a wireless credit card processor for their salespeople. In any sales environment, you’ve got to strike when the iron is hot. Having a sales team armed with a fulfillment tool like a credit card processor could greatly increase your sales! In the back of your mind, always remember that cash is used less and less every day. Some business owners argue they don’t want to pay any credit card fees so they won’t accept credit card payments. If you consider losing a sale altogether, and a potential lifetime customer, than paying a small percentage of the transaction amount is a small price to pay to keep that customer.
Virtual Terminal- Virtual terminals don’t get a whole lot of attention in these web articles because they’re geared toward pretty specific business models. Basically, a virtual terminal is just a website a business can log in to for their credit card processing. There isn’t a physical terminal. This is ideal for businesses that work primarily over the phone or internet, and have little or no face to face contact with their customers.
The Choice Is Yours
Hopefully, one of these three options in credit card terminals will have jumped out at you as the right choice for your business. For some, it will be very clear, and for other’s you may have to make a tough choice. It may seem logical for everyone to choose the wireless terminals since they have the most utility, but keep in mind there is a trade-off for that technology. Sure, you have some wireless interruption, although with all the cell towers around, issues are actually pretty rare. The trade-off you’ll notice the most though, is the cost increase. Most merchant services companies will charge a slightly higher rate for a wireless pos system. Additionally, the initial equipment cost for a wireless terminal is slightly higher than a classic terminal. You’ll probably pay a slightly higher rate for the virtual terminal, as well.
There are typically three different rate levels you’ll pay when you use professional credit card terminals. You’ll have your qualified rate, which is usually the lowest and advertised rate. Then, you have the mid-qualified rate, which is slightly higher. And then, you have the non-qualified rate, which is the lowest downgrade you can get on a transaction. All it means is that your specific transaction does not qualify for the two better rates. Why? Merchant processors assess you a rate based on risk. Often times credit history, business structure, length of business, etc. will make a difference in your qualified rate in the first place. Then, on top of that, each individual transaction is given a risk assessment and that’s what ultimately determines which rate you are charged. The lowest risk transactions get the qualified rate. These are transactions that occur when the customer and their credit card are physically present. There is an assumption that the merchant will be able to verify identity, and run the Address Verification Service (AVS). When the customer is not present, or the card won’t swipe correctly, and the credit card number is manually entered, this is will usually downgrade the rate to the mid-qualified rate. Any transaction that occurs outside of these parameters is then considered a non-qualified rate, your highest rate.
By their nature, some businesses will just be subject to higher credit card processing fees. Consider it the cost of doing business and build it into your profit plan. Other businesses can really shop around and make sure they get the best deal and lowest qualified rate because their business model supports the lowest possible risk factor.