How to start accepting credit card payments

You’re never too small to accept card payments – in fact, it’s critical for all businesses, irrespective of type or size, to be able to accept electronic and mobile payments. If you’re not sure, whether or not your business should be accepting card payments read this article: 5 reasons why your small business needs to accept card payments.

The question though: How do you start accepting card payments? Where do you look? What are your options, and what will work best for your business? In this article, we’re going to compare 3 different ways of accepting card payments: Traditional bank card machines, QR codes and mobile point of sale (mPOS).

1. Traditional Bank Card Machines:

Also known as speed points or bank terminals.

Accepting card payments Traditional bank machine

These are the machines you’re probably most familiar with. They’re used at most large retailers, restaurants and other businesses, and have been in existence longer than the below alternatives. You can rent a terminal from any commercial bank (Absa, Nedbank, Standard Bank, Capitec Bank, FNB) over a pre-determined contractual period.

2. QR Code Payments

Also known by the names of the service providers, i.e. Snapscan, Zapper, and Flickpay.
Accepting card payments - QR codesQR Code payments work when the customer (buyer) has downloaded and installed the service providers app onto their mobile phone, have created a user profile and loaded their credit card details into the app. The merchant (seller) has a designated QR code for their business which is either displayed at their checkout counter or on the till slip. In some cases, a QR code with the specific bill amount embedded in the code is printed on the till slip. The customer simply scans the code via their app, enters the amount (where necessary), enters their security pin (not the same as their bank card pin) and pays.

3. Mobile point of sale systems

Also known by the companies that sell them, i.e. Yoco, iKhokha, Zip Zap

Mobile point of sale systems Accepting card payments Yocorequires an app on a smartphone or tablet that connects to a small card reader via Bluetooth or plug in via the headphone jack of the smartphone. They were created to reduce the cost of accepting card payments for small business owners. You can find out more about that in this article. The merchant (seller) enters the sale amount in the point of sale app and the customer inserts or swipes the card on the mobile card reader. For the purpose of this article, we will focus on Yoco as the mPOS example.

Factors to consider when choosing a card payment system

Which of these three payment options should you choose to enable your business to accept card payments?

Every business is unique and has its own set of requirements. However, there are common factors that affect all businesses that you should consider when selecting a payments platform.

1 How much will it cost you? 

Typical costs to check include:
Rental fees, transaction fees, cost of the device, set up fees and cancellation penalties.

2. Contracts and duration periods.

Running a business can often be unpredictable, so you need to have enough flexibility to adapt your business model when you need to. Understand which service providers implement contractual agreements, and if so, familiarise yourself with the terms, conditions, contract period and termination allowances.

3. Do you need portable/mobile payments solution?

Will you only accept payments in your store, or will you need to accept payments on the go, at markets, expos or for deliveries?

4. What is the setup process and how long does it take?

Some service providers have a lengthier application and set up process than others. If you need a solution urgently make sure you check what the application, signup and setup process entails and an estimated time. Also, review online reviews and/or comments of the service providers – this will give you a better idea of what their customers are saying about them.

5. Who are your customers?

Are they young or old? Local or foreign? What works best for your customers? What is easiest for them? Your customers need to understand and trust the payments platform you use or they will not use it.

6. What types of cards does the system accept?

If you’re targeting international tourists, be sure to spend some extra time understanding which payments platform accepts foreign cards, and if so, which type of cards are valid. For example, high-end or fine dining restaurants may need to accept cards such as Diners Club International or American Express.

7. What support structure does the service provider offer?

Does the service provider offer after-hours support? Weekend support? Are you required to pay for additional support? And lastly, what support platforms are available – telephonic, email, in-app. It’s critical to identify these points ahead of time, especially if, for example, your business operates in the evening, but the service provider only offers support during standard business hours of 9 am to 5 pm.

7. Do they offer any additional features?

Find out what features the service provider can offer to you. Do they go above and beyond simply offering a platform to accept card payments? For example, business analytics tools, integrations with accounting software programs or a point of sale system. Also be sure to ask if they have any future plans to enhance their platform. Keep in mind that although you may not need certain features now, as your business grows your requirements may change.

Comparing card payment options

Now that you know what factors to consider when selecting a payments platform, let’s look at a comparison of these platforms.

FactorBank Card MachineQR CodeYoco
CostsR400 - R600 monthly rental.
2% - 7% transaction fee.
Minimum charge.
Cancellation fee.
Volume commitments.
No monthly rental.
2,75% -3% transaction fee.
Possible R250 call out fee.
No monthly rental.
2,2% - 3,5% excl. vat transaction fee.
PortabilitySome machines are portable.Very portable.Very portable.
Signup & set upTakes approximately 2 - 8 weeks.
Physical paper work required.
Online sign up.
Set up in a week depending on whether or not a site visit is required.
5 - 10 min online sign up.
2 - 4 day delivery.
95% approval rate.
CustomersCustomers are familiar with these machines.Younger more tech-savvy customers really like it.
Does require action/effort from customer to get set up.
People think the card readers are cute, cool and interesting.
Cash up & trackingCount slips and wait for bank statements.Reports in dashboard and SMS notifications.Everything is stored in real time in your Business Portal
Additional featuresCard not present add-on option.Some integrate with WeChat wallet and a number of POS systems.
E-commerce options available.
Point of sale, business portal, integrations with accounting systems and other POS systems.
Contract2 years on average.No lock-in contract.No lock-in contract.
Cards acceptedMost types.
Can activate AMEX on request.
Mostly only local cards and credit cards (not debit). It's important to confirm this with the various service providers.Visa and Mastercard: All local and international debit and credit cards.

Key takeaway points for accepting card payments:

In conclusion, the type of payments platform you choose depends largely on how your business runs and who your customers are.

Choose a traditional bank card machine if:

  • Your business is a large establishment with traditional POS requirements.
  • Your customers are fairly “old fashioned” and uncomfortable with changing their behaviour when making payments.
  • You are willing and able to commit to a contractual agreement and time period.

Choose QR code payments if:

  • Your customers are young and tech-savvy.
  • You typically sell items in a fast paced environment where customers appreciate self-checkout.
  • Trust that you and your staff can manage self-checkouts in crowded environments, and prevent situations where customers enter the incorrect amount or not actually paying for your products.

Choose Yoco as your payment option if:

  • You prefer to own the card reader by paying a once-off fee (or weekly terms) instead of committing to a contract or renting the reader.
  • You would like to be able to accept payments both in-store and on the go.
  • You need additional features which will automatically track your sales and give you business insights.

If you have any questions about payment platforms and the payments ecosystem, please complete this form and one of our consultants will contact you.

About the author: Alice

Alice - Marketing

Content junkie meets red wine (wannabe) connoisseur. Alice completed her B.Bus Sci degree with all the bells and whistles and has since focused on the digital marketing space.

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