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Credit Card Processing for Small Businesses


If you’re used to seeing disappointed looks on customers’ faces when they see a cash-only sign, it’s time to add credit card processing as a payment option for your small business. National Retail Solutions has all the tools and services you need to make this possible. Though credit card processing can be a bit complicated, it doesn’t have to be a source of stress. We’ll explain why you should accept credit cards, what equipment you need to do it, how it works, and what options we offer.

Why Should a Small Business Accept Credit Cards?

If your small business doesn’t accept credit cards, you may wonder whether adding credit card processing is worth the investment. After all, credit card processing involves adding equipment and allowing a little bit of every credit card sale to go toward fees. Let’s discuss why every small business can benefit from accepting credit cards. In brief, small businesses should accept credit cards because consumers want and expect them to. You could lose business if you aren’t sensitive to your customers’ preferences. In a 2017 survey,  just 12% of consumers said they preferred to pay in cash. Most people find debit and credit cards more convenient and preferable to cash. Here are a few reasons many consumers prefer to use credit cards over cash.

1. Credit Cards Are More Secure


Customers may prefer using credit cards because they offer more security than cash. To pay with cash, you have to carry money around, which can make some people feel vulnerable. Whether you fall victim to a pickpocket or accidentally leave your purse or wallet in a public place, you could lose your cash in the blink of an eye. In either of these scenarios, if you only had credit and debit cards in your purse or wallet, you could call your bank to freeze or cancel them. If someone has already made purchases using your cards, you can report these charges as fraudulent and not have to pay them. You cannot do the same with cash; once it is gone, you can never get it back.You cannot do the same with cash; once it is gone, you can never get it back.

2. Credit Cards Are More Convenient

Credit cards are also more convenient for most people. Rather than tracking how much money you have on hand, a credit or debit card ensures you always have access to your funds.

You also don’t have to take the time to count out bills or change, which tends to slow down the checkout process. If you don’t have exact change, it may be a nuisance for the people waiting in line while you are counting your change which can be a nuisance to some people. Coins jingle around in pockets or get lost in the bottom of a purse and weigh it down. Even folded bills take up more space than a credit card. Some people prefer to forego a wallet or purse and carry their phone with an attached sleeve for holding a few IDs and credit cards. While you may be able to cram a couple of bills into your phone sleeve, it’s much easier to stick to cards in this instance.

3. Credit Cards Let You Track Your Spending

Another advantage of paying with credit cards is that it allows a person to track their spending better. Every time a person swipes, inserts or taps their card, whether it’s to buy a sandwich or a sofa, it creates an electronic log of those charges. With cash, you would have to keep track of your spending manually by making entries in a notebook or on your phone or keeping paper receipts for every transaction to compile a payment history.


Credit or debit card users can check their payment history online anytime and can use these records to help them a budget and keep track of their finances. Digital spending records can also be helpful when it comes time to file your taxes, especially if you lose track of receipts.

4. Credit Cards Build Your Credit History

Using a credit card also helps you build a credit history. Even if you’re exceptionally responsible, if you pay for things in cash, you won’t establish a credit history that lenders and others can use as proof of your responsibility. If you faithfully make your credit card payments on time, you’ll steadily build a positive credit history that results in a high credit score. Achieving a high credit score is essential for several reasons. In today’s world, your credit history comes into play whenever you need to take out a loan, whether to finance a new vehicle or take out a mortgage on a home. Your credit history can even influence your insurance premiums.

5. Credit Cards Come With Rewards


Finally, some consumers prefer to use credit cards because, unlike cash, credit card transactions can reward customers with perks like cash back. The cash-back model typically rewards consumers by giving a certain percentage of the cost of each purchase they make back to them. For some cards, this percentage will differ based on what they’ve bought, such as fuel, groceries, restaurants, etc. Some cards reward customers through programs where they can accrue points by making purchases. Once the cardholder gets to a certain number of points, they can earn a reward like a gift card. Another popular reward system is for travelers who can earn airline miles or travel discounts using their credit cards.

What Equipment Do I Need to Accept Credit Cards?

Hopefully, everything you’ve read has convinced you to accept credit cards as a payment method at your company. If you want to maximize your business and please customers, you should give your customers the option to pay with a credit card. So, how can you get set up to accept credit cards at your business? There are ways to manually enter credit card numbers on a computer like consumers have become accustomed to doing on e-commerce sites. However, manually entering information is an inconvenient and inefficient to process credit cards. The best way to process credit cards is with equipment that works together to make the checkout process as quick and convenient as possible. Before we discuss the other equipment that can assist in the process, let’s focus on the essential part of equipment you’ll need: a credit card reader.

Credit Card Reader

A card reader is given the name because it reads the information on a credit or debit card via a microchip, magnetic strip, etc. When a customer inserts or swipes their card when prompted and confirms the payment amount, this card reader initiates the authentication process, which we’ll discuss in the next section. Merchants should ensure they have a card reader capable of reading EMV chip cards since these cards are becoming increasingly popular over the traditional magnetic stripe cards you swipe. According to credit card giant Visa three-quarters of U.S. storefronts now have the necessary equipment to process EMV cards. EMV cards prevent fraud by generating a new code each time customers use their cards to buy something. That way, information from one transaction won’t be vulnerable and can easily be stolen.


EMV chip transactions take a bit longer than purchases with other credit cards, but they’re still fast, at about 15 seconds for a typical transaction. No matter what type of card a customer uses, a card reader makes it easy to share their payment information so their bank can deposit payment into their business bank account.

Other Components Used to Facilitate Credit Card Sales


Small business owners who want a more modernized checkout experience should use a credit card reader when accepting credit cards and use it in an all-in-one POS system. Think of a POS as the brain that connects all the necessary components to facilitate a checkout process. An all-in-one POS system comes with all the essential features for checkout, already integrated to work seamlessly. These elements include your card reader, along with these other crucial pieces of equipment.

  1. Barcode scanner: Barcode scanners make it easy to ring up items. Rather than manually plugging in information, checkout personnel scans each item with their handheld barcode reader. One of the major advantages of scanning barcodes is that you can track inventory in real-time this way. As you scan an item, your inventory records reflect having one less of that SKU in stock.
  2. POS terminal: The POS terminal is the screen you and your employees will use behind the counter. Employees can enter information as needed and use this touchscreen terminal screen to accomplish tasks separate from the checkout process. These could include programming in discounts, managing inventory, checking sales analytics, etc.
  3. Customer-facing screen: The best POS systems will also come with a customer-facing screen directed toward the front of the counter. Unlike the POS terminal, this is not a touchscreen. It’s there so the customer can see the name and price of each item displayed as the cashier rings them up. They can also see the money they save from discounts. A customer-facing screen provides the transparency customers appreciate.
  4. Cash drawer: Cash drawers are essential hardware for any merchant. Modern cash drawers come equipped to prevent theft and keep cash secure. Cash drawers are useful when a customer wishes to pay in cash, but they can also be helpful for customers who pay with debit cards and request cash back.
  5. Receipt printer: A modern thermal receipt printer uses thermal technology rather than ink to print on special paper that will turn different colors under varying degrees of heat. Cash drawers are useful when a customer wishes to pay in cash, but they can also be helpful for customers who pay with debit cards and request cash back.

How Does Low-Rate Credit Card Processing Work?


Now you know why credit card processing is essential and what equipment you need to facilitate these transactions, let’s talk about how credit card processing works. To the consumer, credit card processing looks like nothing more than inserting their card, seeing the sum on their credit card bill, and paying it. However, a lot goes on behind the scenes to make that transaction possible. We’re going to draw back the curtain and explain this process step-by-step. This process has three fundamental steps: authorization, authentication, clearing, and settlement.

1. Authorization

The customer initiates this process by either swiping or inserting their card. The processor then reads the information on the card and sends it to the credit card network, such as Visa or Mastercard. This network acts as the go-between for the customer and their issuing bank.

2. Authentication

The network sends the customer’s payment information to their bank. The bank ensures the purchase is legitimate and not fraudulent, which will determine whether the transaction should proceed. For example, the sale won’t go through if the customer has already reached their credit limit. The card reader should tell the customer whether the system has accepted or declined their payment.

3. Clearing and Settlement

From the customer’s perspective, the process appears to be over at this point, but the merchant still doesn’t have their payment yet. A process similar to the one above takes place, which can take up to several days, to ensure everything is in order before the cardholder’s bank sends funds. The processor transmits the necessary information to the credit card company to settle the payment.

Fees Explained

The funds that get transferred to the merchant will have fees deducted to pay the banks and processors involved in facilitating the transaction. Retailers see a small amount of each credit card transaction withheld, typically around 2 to 3% for a retail store. This fee gets divided three ways, with the most significant amount of money going toward paying the required interchange fee to the issuing bank.


  • Interchange: Credit card networks like Visa and Mastercard set and publish interchange fee sand these networks update the current fees biannually. An interchange fee consists of a flat rate, such as $0.10, with a percentage of the sale, such as 2%. Together, these amounts will satisfy the credit card network’s requirement for each sale.
  • Assessment: Interchange fees aren’t the only fees credit card networks require; they also charge assessment fees. Whereas the interchange fees go to the issuing bank, assessments go directly to the card association. Assessment fees are much smaller than interchange fees, at just a fraction of a percentage per sale.
  • Discount rate: The discount rate is a fee many credit card processing companies charge in addition to the fixed costs associated with interchange and assessment fees. The discount rate, sometimes called the markup, is a flexible amount a processor can set so they get paid for their part in facilitating credit card sales. You can negotiate this rate with some processors.

Processors will use one of these models to determine their fees.

  • Interchange plus: Interchange plus models vary from month to month and are complicated to understand and read on a statement. However, it can be the most cost-effective option for retailers who move many products every month or sell high-dollar items..
  • Flat rate: Flat rate models keep things simple and are tend to be a good choice for merchants whose ticket items are low. Flat rate processing does not take factors like card type into account. For every transaction, you’ll pay one predetermined fee.
  • Tiered pricing: Tiered processing models consist of three possible fees you’ll pay on a credit card transaction, depending on whether it falls into a qualified, mid-qualified, or non-qualified tier. Factors like the type of card and how it’s entered determine which tier it goes into.

What Options Are Available From NRS?

Choosing a credit card processing company to help you with credit card sales, provide equipment, and ongoing processing services is a big decision. Choosing the wrong partner could result in paying unreasonable markup fees or finding hidden charges on your bill. National Retail Solutions keeps things transparent and offers two pricing options for credit card processing so you can choose the best fit for you.

  • Flat rate: The flat rate keeps things consistent, so you know what fee you’ll pay every time, whether someone swipes, taps, or dips their card. This flat rate is 2.49% of the transaction cost plus $0.10, making it one of the cheapest credit card processing options for small businesses.
  • Custom rate: If your businesses process over $10,000 a month in credit card transactions, you can also work with NRS to set a custom rate to fit your business and save you money. You can get a free quote to find out what this rate would look like for you.

Regardless of which rate plan you select, you can usually expect to receive your funds within 24 hours, which is a valuable perk for keeping your cash flow more current. We understand how critical it is to have access to your funds when you need them. According to Business News Daily. Finding a credit card processor specializing in small businesses is critical if you are a small business owner. Otherwise, you risk dealing with credit card processors who don’t understand your industry and expect you to generate at least $10,000 in revenue every month. While NRS has a custom rate option for businesses that generate this much in credit card sales, we also cater to smaller businesses with our flat rate. At NRS, we understand the unique needs of payment processing for small businesses and believe size shouldn’t keep you from having the best technology to facilitate sales and help you manage your growth. That’s why we offer payment services, such as our card reader and processing services, that make it possible to accept all major credit cards and mobile wallet apps, EBT and eWIC. Money isn’t the only factor to consider when it comes to credit card processing. In a previous blog post, we discussed three critical points to think about when choosing the best payment system for small businesses.


  • Security
  • POS compatibility
  • Customer service

When you partner with NRS, you get these valuable qualities and more.

Contact NRS Today for Reliable Small Business Credit Card Processing

The world of credit card processing can seem complicated and confusing, but credit cards are here to stay. If you want to make it easy for customers to do business with you, you should know how to find the best credit card processor to supply you with the equipment to accept all forms of payment.


Consider making a smooth transition into modern technology with the easy-to-use, all-in-one POS+ from NRS, and be sure to count on NRS for all your payment processing needs. When you work with NRS Pay for credit card processing, you may be eligible for a complimentary credit card reader! To get started, request a free quote today.

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