5 Payment Processing Technologies for Small Businesses

peyment processing technology

Most small business owners understand the importance of being able to accept card payments. But what separates small business leaders from the pack is an understanding that payment processing now means much more than allowing your customers to make card payments.

Customers want to have secure options available to them when it comes time to make a purchase. Business owners and employees also want to be able to accept payments in-store or on-the-go while also being able to access data at a minute’s notice. Luckily, these technologies are within reach of any small business.

Here are a few payment processing technologies every small business should have. 

  1. Contactless Credit Card Payments

For years, businesses and their customers associated credit cards with magnetic strips. Customers would swipe their card and then enter a PIN or sign their signature. But new credit cards may make that process a thing of the past. 

There are several downsides to using magnetic strip technology, including the strip wearing down over time and, in some cases, credit card fraud. Credit card and payment acceptance device manufacturers have responded by introducing cards and devices that do not require a customer to swipe their card.

Instead, cards now use short-range wireless technology to transmit the data required to process a card transaction. Not only is this method more secure, but it’s also much faster. So, when the time comes to purchase new payment acceptance devices for your company, be sure to ask if it can accept contactless payments. 

  1. Mobile Payments

Sometimes, it feels as though you can perform any task with your phone. While that’s not always the case, you can make payments using a phone—and, in some cases, with your watch. 

All major mobile device operating systems allow users to make payments using their phones. In most cases, the customer needs to either open an application on their device or select a digital version of their credit card, then wave it in front of a payment terminal. From there, technology similar to that used in contactless credit cards transmits payment information to the terminal. 

Like contactless credit card payments, mobile payments are secure and effortless. It’s also a convenient payment method for customers since it enables them to make payments even if they leave their credit card at home. Be sure to ask your merchant service provider about mobile payment functionality before purchasing new payment processing devices for your business. 

  1. Cloud-Based Payment Processing 

“Cloud migration” is a term you’ll hear if you ask any IT professional about what is trending in their world. Companies are moving away from storing data in on-site servers and are instead choosing to keep it in cloud servers around the world. Payment processing is no different.

The benefits of cloud-based payment processing are clear. For one, cloud-based payment processing is scalable since you can easily purchase more storage capacity as your business grows. It also enables data to flow unimpeded from your payment processing software into other critical business software systems, such as CRM and ERP

Most importantly, it offers additional layers of protection for your company and customer data. This is due to cloud servers being housed in secure data centers. These centers are routinely audited and subjected to penetration tests to ensure they meet industry cybersecurity standards. 

If you have a growing small business, make sure your payment processing systems are in the cloud. 

  1. Gift Card Acceptance

Gift cards from well-known companies such as Amazon, Starbucks, and Wal-Mart are a go-to present for birthdays and holidays. While your business may not have the name recognition of those three, that doesn’t mean you can’t take advantage of all the benefits a gift card program has to offer.

Gift cards are a simple way to build customer loyalty and create a new source of revenue for your business. In years past, many small businesses were unable to incorporate gift cards into their payment systems. Oftentimes, gift card transactions were recorded manually. The process was inefficient and made tracking the success of a gift card initiative difficult.

Modern payment processing vendors provide their customers with the resources necessary to offer their customers scannable gift cards. Small businesses can reap the benefits of a gift card program without their employees needing to write down transaction records. Check with your payment acceptance vendor to see if their systems have gift card functionality. 

  1. Level II and Level III Data Processing

Any time a customer swipes or waves their card in front of a payment terminal, several data points are collected. In most cases, only the merchant name, transaction code, and transaction date are transmitted whenever a transaction is processed. But some businesses benefit by collecting a few more data points. 

Level II and Level III data processing are primarily used by businesses that serve other companies. In most cases, these transactions are made using a corporate card. And, when the transaction is processed, additional data points are collected, including the merchant zip code, sales tax, item description, and more. 

So, what does it mean to your business? By integrating Level II and Level III data processing into your payment acceptance system, you can save up to 0.50 percent on transaction fees. As a small business owner, you know the importance of finding even the most minor areas of savings. Over time, cutting down on transaction fees can add up. Ask your payment processing vendor whether they can design a Level II or Level III data processing solution for your business. 

Set your company apart with superior payment processing

As a small business owner, you have a lot to think about. Payment processing likely isn’t always top of mind. But modern payment processing technology can keep your business competitive now and into the future.

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Aaron Smith

Aaron Smith

Aaron Smith is an LA-based content strategist and consultant in support of STEM firms and medical practices. He covers industry developments and helps companies connect with clients. In his free time, Aaron enjoys swimming, swing dancing, and sci-fi novels.