person holding phone and making a credit card transaction
From unknown fee percentages to the potential for a security breach, there are many facts about credit card processing that fly under the radar. — Getty Images/radilfanil

Credit card processing may seem straightforward but there’s actually a lot to consider. Getting approved for a merchant account and keeping up with constantly changing security protocols can be challenging.

There are many variables that can impact credit card payments, especially in a retail environment. But you don’t have to be an expert on credit card processing to make informed decisions for your business. You just need to do a little research. Credit card processing regulations and trends are constantly changing. Here are three things you need to know about credit card processing in 2019.

Credit card processing fees are on the rise

Accepting credit cards is a must but the fees can take up a good chunk of your profits. In fact, the Wall Street Journal reported that in April 2019, Visa and Mastercard plan to increase a range of credit card processing fees.

Unfortunately, most businesses don’t fully understand what they are paying in fees. The fees largely depend on the size of the transaction and how it’s processed.

The average credit card processing fee will be around 2% if the card is swiped in person; but it could be closer to 3% for online or phone orders when the customer isn’t present.

However, there’s little consistency when it comes to processing fees, pricing models and transaction fees. Consider comparing vendors to ensure you get the best deal possible. Ask questions and make sure to read the fine print in the contract so you know what you’re getting into.

Attacks on small businesses are on the rise, mostly because they are often easy targets.

Stay up to date on PCI compliance changes

As a business owner, you must ensure your business complies with security measures set by the Payment Card Industry (PCI). Failing to stay PCI compliant could result in hefty fines for your business or even the inability to continue processing card payments.

But, as hackers continue to find new, more sophisticated ways to breach security systems, PCI compliance guidelines continue to change and adapt as well. For instance, the added protections offered by EMV (Europay, Mastercard, Visa) cards have caused many hackers to focus on over-the-phone or online transactions.

As a result, a new set of guidelines was introduced in 2018, addressing procedures and technology phone-based businesses can use to keep customer data safe, including:

  • Enabling multi-factor authentication
  • Using anti-virus software
  • Storing mobile devices to minimize the risk of accidentally recording customer information
  • Only sharing credit card data on an as-needed basis

Small businesses are easy targets for a security breach

When most people think of security breaches, they picture big business attacks — like Target’s 2013 security breach — and thus, many small business owners assume they aren’t big enough to attract hackers. However, this is not the case.

Attacks on small businesses are on the rise, mostly because they are often easy targets. One study found that 46% of businesses surveyed had been victims of a data breach, and only 33% had purchased security software.

Unfortunately, most businesses don’t realize a breach has happened until the damage has left its mark. A study conducted by IBM found that the average time to identify a security breach is 197 days. And it took most businesses an average of 69 days to contain the breach.

The financial damage caused by a data breach increased by over six percent in 2018. Companies pay an average of $148 per lost or stolen record; and, the bigger the breach, the more costly it becomes — not to mention the time lost and inevitable damage to your company’s credibility.

Customers expect fast online and in-person transactions, yet accepting these payments continues to become more complicated. By focusing on minimizing credit card transaction fees, staying up to date on PCI compliant changes, and guarding against security breaches, you’ll set your business up for success in 2019 and beyond.

CO— does not review or recommend products or services. For more information on choosing the best credit card processors, visit our friends at business.com.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

Published April 09, 2019