​Credit Card Processing Options for Australian Businesses

Studies have estimated that only 23 percent of purchases will be made using cash by the year 2017. What would be the consumers’ new payment method of choice? That would be the shiny credit card/s, of course.

Although issues like identity theft and fraud led to credit cards having a rocky start, vast improvements in both finance and encryption technology have made the process of paying for purchases via credit card far easier and safer nowadays. And since it’s far more convenient (not to mention safe) to whip out one’s credit card for swiping rather than carrying a big amount of cash around, more and more people prefer to purchase their wares through digitized, paperless transactions.

Thus, it’s even more crucial now for most small businesses to look into exploring the different credit card payment processing options out there. And given that globalization is leading to a world that’s only getting smaller and smaller via online commerce, even small businesses in Australia (particularly those that also have Internet operations) are pressed to expand their list of available payment methods. After all, no one would want to lose their sales or clients to a competitor whose only edge is having the means to process credit card payments.

But what sorts of credit card processing options are available to businesses in Australia (or anywhere else, for that matter)? The following are just a handful of the said options, although they are by far the most preferred for their secure and convenient features:

1.)Merchant Account Services – These are usually offered by banks or financial institutions.

a.Special bank accounts for processing credit card payments – Since merchant account services behave as the middleman between the business or store and the customer’s bank or credit card company, they can set up any necessary accounts that could be allotted solely for credit card payments.

b.Credit card processing equipment – These can either be purchased or rented by a business, depending on the need for such. Hence, small businesses in the more remote areas of Australia may want to opt for renting the equipment if most of their clients pay cash upon purchasing.

i.Point-of-sale terminals, wireless terminals, PIN terminals, or swiping machines are the most commonly used equipment for processing credit card payments.

ii.Apart from the usual transaction fees, which are usually a very small percentage (about 0.5 to 5 percent) of each amount transacted, business owners might also have to pay monthly payments such as statement fees or minimum fees. There are no standard rates for the said fees, so business owners who are contracting the equipment for the first time should carefully canvas for prices before committing to one provider.

However, most merchant account service providers have also adapted to modern times by offering variations on their services to accommodate different clients. These variations include:

a.Mail or telephone order (MOTO) merchant accounts - These were developed for businesses like mail-order companies who generally transact over the phone or through snail mail. Rather than swiping a client’s credit card, it just requires the employee processing the payment to call up the said client and confirm the purchase.

b.Internet merchant account – As its name suggests, this sort of account was designed for online businesses where the service provider hooks up with the client’s website to collect and process the credit card information from incoming customers.

2.)Online credit-card processing – This option is best for Australian businesses that either don’t regularly have a lot of credit card transactions or those with bad credit. (Merchant account services generally list a good credit score as one of their prerequisites for obtaining an account.) Third-party online credit-card processors do away with setting up separate accounts and instead process payments directly by placing interactive buttons and forms directly onto a client’s website. Some online credit-card processing service providers have also been known to issue portable mobile card readers that can be attached to smart phones and other similar devices. This has enabled brick-and-mortar businesses to avail of this credit card payment processing option as well, regardless of whether they have an online presence or not.

3.)Mobile Credit Card Processing – Like online credit card processing, this option allows business owners to turn any mobile gadget into a working credit card terminal. This option is best suited for businesses that need to be able to accept credit card payments virtually anywhere. These include traveling salesmen, trade show participants, as well as food trucks and street vendors. Businesses that offer offsite repair services (e.g., plumbers, electricians, etc.) might also want to consider opting for mobile credit card processing in case their employees happened to service a client who didn’t have enough cash on hand.

While contracting with a merchant account services provider can be costly, this is perhaps the most convenient option for Australian businesses whose sales are mostly generated through their brick-and-mortar stores rather than online. This is because merchant account services virtually provide all the tools needed to process credit card payments such as:

However, unlike with online credit-card processing providers that require very minimal maintenance fees, mobile credit card processing providers do have significant charges for providing services like equipment rental and wireless transactions. Thus, Australian businesses who are leaning towards this option may want to evaluate if their income streams from credit or debit card sales would far exceed the costs of having a mobile terminal on standby.