credit card processing
There are several things to think about when applying for credit card processing in Boulder, Colorado. First off, you want to think of security. If you accept credit card payments, you will sign an agreement to uphold the PCI requirements, or Payment Card Industry Data security standards. After that, it depends on what kind of method you want to use to process!
Credit Card Processing Methods
That’s how it works. But how do you start actually taking credit card payments? There’s a wide variety of methods, each appropriate to different situations.
Credit Card Imprinting Machines
The simplest way to process credit card transactions is also the one that’s been around the longest. Imprinters, those little plastic swipe machines that carbon copy the credit card, make quick imprints of the credit card information for you to process later. The downside is that, if a card is declined, you won’t find out until long after the payer is gone, and you might have to work to track them down. You can generally get an imprinting machine for free, or for a small fee, from the bank where you opened your merchant account.
Imprinters are an easy and inexpensive way to collect information on site. However, you still need to process the charges later using one of the other methods, and there’s a substantial risk inherent in carrying imprinting slips around, as you’re essentially carrying a stack of credit cards. If you lose the slips, in the best case you’re out a bunch of payments. In the worst, you may have just funded some nefarious person’s taste for expensive electronics and exotic trips.
Imprinters make the most sense when you only need to take a few payments in some kind of temporary location. They’re a short-term, quick-fix type of processing method rather than something you’d use to process a volume of credit cards over a long period of time.
If you’ve collected credit card information — via an imprinter or through mailed-in donation-via-credit-card forms — one of the most straightforward ways to process the charges, though likely not the cheapest, is to ask your bank to do it. Many banks will run these payments for organizations that have merchant accounts with them.
The payments are then deposited into your merchant account and make their way into your regular bank account within a few days. The bank is responsible for destroying the paper forms, reducing your risk. If you almost always receive your credit card payment information in paper, bank processing can make a lot of sense.
Credit Card Terminals
If you need to take a higher volume of payments in on-site situations, consider investing in a credit card terminal, also called a “swipe terminal.” These small machines allow you to swipe a credit card, enter the payment amount on a keypad, and then process the payment — and, in many cases, even print out a receipt. In most cases, you can buy them for a couple of hundred dollars from the bank that hosts your merchant account, or rent one for a particular event. AuctionPay and sites like it rent terminals with a focus on nonprofit events. [Editor’s Note: TechSoup offers discounted terminals and merchant accounts to nonprofits and public libraries through its programs with Dharma Merchant Services and Sage.]
Terminals may require a power source, though some run on batteries. They also require connectivity, generally a telephone line, to process credit cards in real time. Some allow you to store transaction information to process when you can connect to a phone line. Unlike imprinters, the terminal stores the information internally so it’s more secure, and so you won’t have to enter it later, but you still run the risk of not receiving payment for any declined cards.
Terminals are widely used and effective in a number of different situations, from on-site events or a development office that needs to process a lot of phone credit card donations to gift-shop type settings. However, integrating terminals with other databases — say, to process a donation and record it at the same time to a constituent record — can be difficult. If you need to do a lot of this, one of the other methods might work better for you.
An alternative to portable credit card terminals, smartphones, or other mobile devices (like iPads) can now process transactions over 3G or wireless connections. They do this by either manually entering card numbers or — with inexpensive additional hardware — swiping cards directly. This functionality can be provided through a vendor, like Square or Sage, or you can download a card reader app for free or at a low-cost.
This method has the advantage of portability, as you can process transactions anywhere you have phone reception, and requires less hardware to purchase provided you already have a smartphone or other mobile device. Vendors will often include a processing method, factored into the cost of the product, while the apps will work with online processing services like Authorize.Net.
There are security issues to consider, though. Does the app you’re using encrypt the numbers for protection? When a card is swiped, does it show the full number, or just the last four digits? Are the credit card numbers actually stored on your device? They shouldn’t be. Remember, too, that if you plan to leave your device somewhere, like a storefront, that they are much easier for a thief to steal than a credit card terminal, and a more attractive target.
To save time over manually entering every credit card transaction, consider hardware that lets you swipe cards. You can buy such devices to connect to a laptop or personal computer via USB, or to most mobile devices — even Apple products. They range in size from a basic, small card reader to something that can actually hold your mobile device, often extending battery life. These readers can run from about $20 to $150 or more. One mobile payments company, Square, provides their mobile card reader for free to new customers.
A “virtual terminal” allows you to enter credit card and payment information into an online form and process it over the Internet. You can “rent” a virtual terminal from an online payment processing specialist, such as Authorize.Net, usually for some combination of a monthly fee and a percentage of the transactions.
Virtual terminals don’t often support swipe hardware, and thus require you to take the time to manually enter credit card information, and they don’t integrate easily with constituent management systems. Such limitations mean they’re probably not the best solution for processing a lot of payments, but they can be convenient options for processing a few payments if you have an Internet connection.