Accept Payments 101: A Business Owner's Complete Guide to Payments

If you’re starting a business, you have a lot on your plate. You’re picking a name, choosing a location (or if you’re online, building a site), determining a business structure, obtaining licenses, registering for taxes — the list goes on and on.

But what, perhaps, is the most important thing on your list? Determining how to take payments.

Whether you’re serving a 12-course tasting menu or designing logos for other companies, taking and processing payments ensures you can continue to do what you love.

Our payment processing overview can help you determine what is best for you and how eCommerce payment processing works. From cash to Apple Pay, invoices, or credit card readers, there are plenty of options to get paid. You need to determine what kind of payments you are going to accept, how to accept those payments, and how to manage those payments.

Many businesses start out by only accepting cash. It’s easy to manage, there are no processing fees, and you have access to the money right away. But only accepting cash may rule out a whole customer base that no longer uses paper currency, a group which is ever increasing.

More and more consumers are using credit cards and mobile payment methods for even the smallest transactions. In 2016, the value of credit-card transactions surpassed the value of cash transactions globally for the first time and grew to 63 percent of all transactions in 2019, according to the Reserve Bank of Australia. “Reserve Bank of Australia”). So being able to accept credit card payments means a better likelihood that your business will grow.

The most traditional form of credit card is a magnetic-stripe card. It’s the one that you swipe. But you can’t just accept magstripe cards; EMV cards, also known as chip cards, are nearly ubiquitous at this point and are becoming the preferred payment method due to their more secure features. Many Australian owners also accept EFTPOS cards, as these are widely used here.

And then there’s Apple Pay and Google Pay, which use near field communication (NFC), which is quicker and even a more secure payment processing method than EMV.

All this information can be overwhelming, but we have you covered with our payment processing overview. To help you learn more about the different types of payments that your customers use and how you can find a system to accept them, we’ve pulled together articles about all sorts of payment types and payment processing services. Just click any one of the images above.

How to accept payments

Once you have a handle on the payment landscape, you should think about how to take payments. You’re going to need a payments processor — preferably one that has clear and simple pricing (with no hidden fees!). And you’re going to need the hardware to physically take the payment and the software to help track payments. In other words, you’re going to need a point-of-sale system.

At a basic level, a point-of-sale system includes hardware that allows you to receive credit card payments from customers and software that routes those funds to your bank after each sale.

To be clear, a POS is not the same thing as a cash register. Cash registers are machines that record sales, give change, and store money. Cash registers don’t accept credit card payments and require a separate card processor system. Nor do cash registers do eCommerce payment processing. However, you can accept online payments with Square.

In addition to taking credit card payments, POS systems can include (or integrate with) other types of software that help you run your business, such as inventory management software. Depending on the system you choose, it may also help you pull sales reports, look at analytics, manage employees, run marketing programs, and much more.

The more you can access all your business’s information from one place, the more time you save — time that you can spend on improving your business, touching base with customers, marketing, and more.

You should also determine what other types of software will help you run your business and then find a POS that supports it. Try to future-proof your system so you don’t have to look for a new POS when your business grows. Think about the software you need not only now but also in six months, a year, or two years. This is especially true if you plan on having an eCommerce payment processing or multiple brick-and-mortar locations.

Where to start

So you know what kind of payments you need to take, what you’re looking for in payment processing services, and the type of hardware and software you need to run your business. Where do you find it?

You have three options when looking for merchant services:

  • Banks
  • Independent sales organisation (ISO)
  • A company like Square

In order to evaluate which option works best for your business, you should think about a few things:

  • Hardware: What’s the cost of the hardware you need? Do you have to rent or lease the equipment or can you buy it? If it needs repairs, how expensive is that (in terms of time and money)?
  • Software and integration: Are your hardware, software, and processor three different systems bundled together? Or are they built to work together as one system?
  • Contract and fees: What does the merchant services provider charge fees for? Are the fees easy to see upfront?
  • Security: Do you have to make sure all your systems are PCI compliant? Or does the provider do secure payment processing for you?
  • Transfers: How fast does the provider transfer money into your bank account? Are there holds put on your cash?
  • Ease of setup: Do you need a dedicated employee to look after your systems and your vendors? Or can you manage the system on your own?

Hopefully, our payment processing overview will help you choose the best merchant services provider and set up your point of sale. After you choose, then it’s time to start selling. Here are some best practices for growing your business: