Most entrepreneurs focus on the product, especially when they’re starting or expanding. And that’s valid, considering that’s what customers want! But in the whirlwind of production, marketing, staffing, and other crucial business concerns, one often-neglected aspect of the customer journey is the payment process.
Many businesses stumble at the finish line with an inefficient payment process. A 2018 global survey found that 96% of shoppers have experienced leaving a store without buying anything, and 51% have cited “lines were too long” as a reason for doing so.
Leave customers with a lasting positive impression by finishing strong with a smooth checkout process. In this blog, we cover everything you need to know about payments.
Payment Processing 101: Everything to Know to Get Started
1. POS vs. Cash Register
Most people already know what a cash register is. And if you’re a startup or small business owner, you have likely encountered the term “point of sale system” before. But contrary to what some may think, these are two different things.
A cash register is a piece of hardware that records transactions, calculates the change to be given, and stores money. The cash register itself cannot process card payments and may require supplementary hardware and software to accept non-cash transactions.
On the other hand, a point of sale (POS) system has both hardware and software components working together to accomplish various business processes. The main advantages of POS systems are swift payment processing and real-time inventory management. But the best POS systems allow software integrations to third-party solutions for added functionality, such as employee management, customer data tracking, and email marketing.
Once upon a time, POS systems were deemed too costly for small- and medium-sized businesses and thought to be used only by large corporations and franchise brands. However, with time and innovation, POS solutions have proven to offer significant value for money because of their versatility and flexibility.
Consider what your business needs now, as well as what it needs to scale up. Choose a payment solution that can anticipate and accommodate growth and pivots.
2. Hardware and Software
Anyone who has ever shopped at a store or eaten at a restaurant or fast food joint knows what the counter looks like. But for your business, consider what hardware and software will meet the payment needs of your customers. Do they pay more in cash, card, or mobile wallets? Do they like availing and using gift cards? Do you have an existing loyalty program, or are you planning to launch one in the future?
Hardware can include the monitor (and keyboard, if it’s not a touchscreen), the money storage tin, barcode scanner, card processor, and signature panel. Evaluate the following factors:
- Will it be more cost-efficient to rent or buy the device/s?
- How much will the repair or maintenance potentially cost, and is it convenient to do?
- Can the hardware accommodate supplementary devices, like add-on attachments, from other brands or providers?
Software pertains to the built-in capabilities of your payment processor, and whether it allows for upgrades and integrations. Here are some considerations to ponder:
- Is the software specially designed to work with your hardware, or are they separate systems that are bundled together?
- Can the software integrate with third-party business solutions? For example, you may already have an existing email marketing service that you’d like to integrate with POS software to easily target your returning customers.
- Does the software run on the cloud, or do you have to be in the store to access your data?
Anything related to money and information must have fortified security to prevent hacking, theft, fraud, and other severe business risks. All sorts of confidential data go through your payment hub every day, from your sales history to your customers’ personal information.
Basic cash registers typically come with some form of lock and key system to prevent theft. But this may not be enough to deter the risks that come with accommodating various non-cash payment methods used by consumers today — particularly card, digital, and contactless options.
Online businesses and those with eCommerce sectors must encrypt sensitive information that is inputted into their websites, such as customers’ personal details and payment information which they typically share upon checkout. If you are accepting card payments, ensure you are PCI compliant.
As the famous saying goes, “time is money.” When selecting the best payment processing system for your business, factor in the time it will take to implement the system, especially if it’ll be rolled out across multiple touchpoints (e.g., several physical locations, or both physical and online stores).
If it’ll require several hours of downtime, crunch the numbers to see if you can afford to halt operations for that timeframe. If not, consider how it’ll affect your operations, especially if it’s being installed on-site, and plan accordingly so that you don’t turn customers away.
One of the most important things to know about payments is to pick a processing system that’s easy to learn and easy to use. You and your staff will likely be processing payments while conversing with customers to build rapport or answering questions about upcoming promos. If you have a payment system that’s not intuitive and requires a ton of focus to use, you will likely have slower transactions, commit more mistakes, and have unhappy customers.
Choose an intuitive payment system that won’t scare off your non-tech-savvy staff members. For example, modern POS systems often come with touchscreen interfaces that are similar to tablets. This way, if you know how to use a smartphone or mobile device, you can quickly learn how to navigate a POS system.
6. Provider Contracts and Fees
As with any product and service, practice due diligence before committing to something. Do your research, read customer reviews, and compare various providers. Cost is a deciding factor for many but the cheapest system may not come with all the features you need, while the expensive one is not necessarily the best in the market.
Weigh the pros and cons against the price tag. And even after you’ve identified the best payment processing solution for your business, read all the fine print and cost line items before you sign.
True POS is a trusted one-stop hub for all your point-of-sale system needs. Contact us today for a free quote!