Choosing a company that helps you accept credit cards can be challenging, and there are several factors to consider before selecting a service. To find the most convenient and least expensive route between your customer’s credit card and your bank account, you want to look for low rates, few fees and month-to-month service contracts.

First, identify how you do business with your customer:

  • Card present: In-person transactions that use a POS system, credit card terminal or mobile card reader
  • Card not present: Remote transactions conducted online or over the phone

Once you decide that, you can determine what type of processor to work with:

  • ISO/MSP or direct processor: These companies can set you up with a merchant account. ISO/MSPs include companies such as Payline Data, Flagship Merchant Services and Helcim. Direct processors include Chase Paymentech, Vantiv and Elavon. This type of processor is a good choice for a business that processes more than $3,000 per month.
  • Payment facilitator or merchant aggregator: These companies sponsor merchants under their master merchant accounts and are often classified as mobile credit card processors. Generally, this type of processor works best for very small businesses that process less than $3,000 per month. If you process more than that, you may qualify for better rates from an ISO/MSP. Payment facilitators include Square and PayPal.

Next, you need to decide how you’re going to accept payments and what type of processing equipment you need. Here are four basic ways to accept credit cards:

Point-of-Sale (POS) Systems

  • A complete checkout terminal typically includes a tablet or touchscreen, a cash drawer and a receipt printer. Barcode scanners and other peripherals may also be added.
  • It connects to or is used alongside a credit card reader.
  • Best for businesses with a physical location, particularly those that want to connect to other business systems such as accounting or inventory.

Mobile Credit Card Reader

A portable device and/or app that lets you accept credit cards anywhere using a smartphone or tablet.
Can be used as a stand-alone device or connect to a point-of-sale system.
Best for businesses that sell in a variety of places, want to process transactions from anywhere in the store or only run a few transactions each day at a physical location.

Credit Card Terminal

  • A piece of hardware used exclusively to accept credit cards. It is usually provided by or purchased from a merchant account provider.
  • Should be able to read both EMV chip and magnet stripe cards and include NFC technology so you can accept mobile wallet payments.
  • Best for businesses that need a card reader to connect to or work alongside a POS system, or a business that doesn’t need its credit card processing system to do anything but accept payments.

Payment Gateway

  • An e-commerce solution that you use with shopping cart software or an e-commerce platform to accept payments through your website, blog or online store.
  • Is available from most processors. If you already accept cards at a physical location, check with your processor before signing up with another service for your online processing.
  • Best for businesses that sell goods or services online.