Accept Credit Card Payments – Gone are the days when cash was the only option for payment. As the world is evolving, so are the payment solutions. There are various payment options now available for consumers to purchase their necessary as well as luxury items. These include digital payments, wallet payments and, credit and debit cards. As payment solutions are increasing, there is a lot of pressure on businesses to accept payments through credit cards in all aspects. Businesses are therefore evolving and trying their best to accommodate their customers with each and every advanced payment method that is available in the market. As a business owner, you would want your consumers to be fully satisfied with you and have the ease of paying with whatever payment method is convenient to them.
If you are a business owner, you would be aware of the fact that to accept credit card payments you need to have a registered company account. However, you must also be aware of the complexity of this registered account and, how you need to have an application from the account provider and, fill in contracts that are lengthy to read and, go through. Moreover, there are a variety of additional charges that you will have to cater to.
No doubt a business account provider would give you a lot of benefits, but there are some complexities which you might want to avoid by choosing to accept credit card payments without registering as a company. But first, the question is whether you can accept credit card payments without registering as a company or not?
Can You Accept Credit Card Payments without registering as a Company?
The answer is yes, you can accept credit card payments without registering yourself as a company. In other words, you can accept payments via credit cards without a business account.
What is a Business account?
Like every other account, a business account is an account in a bank that lets you accept payments made by consumers through credit cards. As you accept credit card payments, a business account displays your funds of business received as payments made through credit cards until the consumers have paid their credit card bills.
When you own a business and decide to accept payments made from credit cards, you have to look for a business account provider. Once you have found a suitable provider, you have to apply for a business account. You will have access to a business account once you go through some underwriting and, negotiating contract process. This is the usual process.
As a business when you finally own a business account, you can accept credit card payments in person or through a virtual terminal, or online.
Process of accepting Credit Card payments with a Business account:
- As a business when you accept payments made through credit cards, the company that processes your payments then transfers the related data to your business account.
- While this takes place, the processor of your payment then consults with the bank of your customer, which is the issuing bank. This is done to find out whether the information of the payment is denied or accepted.
- Once the bank of the customer accepts the transaction, as a business you can accept your customer’s credit card payment and, continue with the transaction.
- As soon as the transaction is accepted, which ever payment processor you have chosen, would lessen any charges that they are surcharging and would deposit the remaining funds in your business account.
This is how the process works using a business account. By a business account, we mean that having an account that is dedicated to your company.
How do I accept credit card payments without registering a Company?
If you wish to accept credit card payments without registering as a company, you will still need an account. But you can do so by working with a service provider for your payments. These providers can be referred to as third-party providers or processing aggregators or even payment facilitators.
Some popular third-party payment providers are PayPal and Square. These providers have a business account that comes with their service. It means that you do not have to apply for and get yourself a business account. The third-party payment providers accept all their customer’s funds in their business account and also face all the risk factors that are associated with accepting payments through credit cards on behalf of the company or the business itself.
When you choose to work with a third-party payment facilitator, then you do not have to own a business account or register yourself as a company to accept credit card payments. Instead, whichever facilitator you choose would have a business account themselves where they would gather all the funds of their clients and then would take a day or two after the transaction to transfer to you as a business.
Payment service providers let you accept payments
Payment facilitators or payment service providers let you accept payments made through credit cards by customers with ease and in a variety of ways. This is the reason why payment service providers are in high demand by businesses. They cater to various businesses and, all their needs. However, you must choose a payment provider that suits your needs as a business. This may include if you choose to accept credit cards online, use an eCommerce integration platform, or in person.
Usually, payment service providers add software or hardware accompanied by their service. This hardware or software helps in processing payments. However, these payment facilitators do charge a transaction fee along with some additional charges.
Once you choose the suitable provider for your business, you will be able to easily apply for an online account. It all depends on the accepted method of your payments. You will be able to accept credit card payments immediately after having a payment service provider account.
The process of accepting payments through credit cards would be the same as if you had a business account. The only difference would be that instead of your business account then it will be your payment service provider’s account.
How working with a payment service provider is different from working with a business account provider?
A common question that most of you would be having is that how it is different from registering your company instead and having a dedicated business account instead. Below are the facts how choosing a payment service provider would be different from having your company registered instead:
- The Process is short and easy
The process of applying for a payment service provider is much easier and less time consuming than applying for a dedicated business account and having yourself registered as a company. If you register yourself as a company and apply for a business account, you will have to go through a lot of underwriting. Although this is done to ensure that you as a business are not going to pose any risk, still it takes a lot of time.
On the other hand, a payment service provider offers a simple and faster process of qualification. Though it would be assuming the same risk as business account providers. The reason behind this is that it is catering to a big group of business altogether with one business account.
It is an All-inclusive platform
If you choose a payment service provider for accepting your credit card payments, then you are choosing an all-inclusive platform. It means that you will be able to choose among various solutions. For example, if you choose Square as your payment service provider then you can choose among various payment options. Such as Square Invoicing, Square Point of Sale, and Square virtual terminal. All these options depend on how you want to accept your credit card payments. And where you need to accept them. Additionally, when you choose payment service providers. You receive additional features such as when you choose Square. You get access to the Square dashboard, their PCI compliance, and various other security measures.
All these features are free of cost. You sign in to the accounts of payment service providers free as well as receive access. To a variety of tools without paying any monthly charges.
It charges less fees
Payment service providers do not charge higher fees like business account providers. Instead, they charge very nominal fees which are quite know to the account holders. Usually, what payment service providers charge is based on what kind of a transaction is process. Unlike business account providers, payment service providers do not charge early terminations or contract charges. Setup charges, PCI compliance charges, or refund charges. Whatever payment service providers charge is clearly states on their website.
The following advantages of payment service providers are exceptional. But that does not mean that business account providers do not offer any good perks. Business account providers provide you with interchange-plus pricing which is the most affordable pricing type available for processing. However, what makes them a rather expensive option are the various additional charges. That they charge with a very complex contract. Moreover, apart from these, there are various other charges as well that they charge which are not fully transparent.
What are the drawbacks of choosing payment service providers?
Payment service providers are an excellent option. If you do not want to get register as a company to accept credit card payments. However, every good thing has its own perks and drawbacks. Likewise, payment service providers also have some downsides which you must know about before you choose one. The biggest downside is that you can face termination of your account or your account can put to hold. This happens when your payment service provider thinks that your business’s nature is very risky. They can monitor your account, put it on hold(freeze) or even cancel it. There is no doubt in the convenience that these payment service providers offer. But this downside of it also cannot ignore. There have been a lot of complaints like these for payment service providers such as Square and Stripe.
Apart from this, there is a lack of customer service solutions provided by these payment facilitators. It is observe that business owners face a lot of trouble seeking help from customer representatives. In cases of closure of accounts and account freezes which is very disappointing.
This kind of problem does not occur with business account providers. Instead, you can get a very good response from customer service representatives when you need help. You will find their customer representatives very helpful and would be aware of your business activity.
Top Payment Facilitators you can choose from
You can accept credit card payments without registering as a company. Instead of having a business account for your company, you can choose a payment facilitator. This would let you accept credit card payments while giving the convenience of credit card payments to your customers and avoiding the downsides of getting registered as a company or opting for a business account.
Once you have decided to opt for a payment facilitator, you must choose a facilitator that is the most suitable for your business. Here are some popular payment service providers that you can choose from:
One of the most popular and some-what exceptional payment service providers that most businesses choose is Square. The best part about it is that it offers a variety of options to its customers. It lets you accept payments made through credit cards without having your company registered and, that is what you are looking for.
When a business opts for Square, it gives access to a POS system that comes with various software and hardware options, a virtual terminal, and, an online platform for payments. This is not it. There are other perks of choosing Square that you can avail yourself of once you have an account.
The signing up process of the square is easy and free of cost which makes it more convenient for business owners. As soon as you sign up with Square, you can start accepting credit card payments from customers. It doesn’t take much time. Their charges for in-person payments start from 2.75 percent with the use of a card reader terminal. Moreover, Square provides you with a free magstripe reader when you sign up. Along with this, you get access to the Square dashboard, PCI compliance, app marketplace, customer support and, fraud and security monitoring.
Stripe is also a popular payment service provider chosen by many popular businesses. It lets you sign up for an account for free and lets you get started with accepting credit card payments right away. You can accept credit card payments as well as other payments without having a registered business account. When you can easily accept payments through a payment page on your website, embedded checkout, and, recurring invoices in terms of online payments. You can also accept payments in person using the Stripe terminal.
The service of this payment facilitator includes various other features such as PCI compliance, dashboard access, data security, customer service, and more.
Most of you would be aware of this name but would not be aware of what it actually does. It is a payment facilitator which is considered to be the first option for any business owner who wants to accept payments without registering their company. PayPal is known for providing the best business solutions to business owners. With the use of this excellent payment service provider, you can accept credit card payments on your business website, in person, and by invoicing customers. Like other payment service providers, PayPal does not charge for the setup or any other monthly charges. It also does not charge for termination. However, if you choose any of their services that are exclusive such as PayPal Payments Pro, then you would be charged additionally.