Hardware stores offer a variety of home improvement tools, landscaping materials, painting tools, and remodeling equipment for contractors and DIY home projects. Most American homeowner projects are under $5,000, but larger kitchen and bathroom renovations are growing in popularity. Consumer purchases can range from a small hammer to a truck full of lumber. While many make purchases online, 82% of homeowners enjoy exploring products and displays in-store to see all that is available.
The DIY home improvement industry has grown exponentially during the pandemic lockdown, especially through gardening projects. This is promising for small hardware stores, as they typically excel in customer service and building customer relationships.
Most customers prefer to pay for all of their goods by credit card. According to Statistica, 38% of point of sale payments are made by credit card. You want to accommodate all of your customers, from those who spend thousands on their home improvement project to individuals who come in for a hammer or nail. Whether your business is an established hardware store or a start-up, you know you must be able to process credit and debit cards easily and efficiently.
Credit Card Processing Basics
When you accept credit cards, you give your customer an alternative method to pay you. In order to receive funds from the credit card company, you need to choose a credit card processing company. Credit card processors are the partners that make the transactionAn act between a seller and a cardholder that results in either a paper or an electronic representation of the cardholder’s promise to pay for goods or services received from the act. The action between a cardholder and a merchant that results in financial activity between the merchant and cardholder’s account.... possible and ensure that you get paid.
The cardholder is the person who has a credit or debit card. Merchants are the businesses that accept the payments for products and services. A merchantA business that accepts credit cards for goods or services. bank creates and maintains the merchantA business that accepts credit cards for goods or services. accounts. MerchantA business that accepts credit cards for goods or services. banks enable merchants to accept payments from credit and debit payments.
The payment processors are companies that process debit and credit card transactions. They connect merchants, merchantA business that accepts credit cards for goods or services. banks, and card networks to make credit card payments possible. An issuing bank is a bank, credit union, or other financial institution that issues debit and credit cards to the cardholder through card associationsVisa and MasterCard are members of the associations. They establish and administer rule and regulations for the credit card industry..
When we say card associationsVisa and MasterCard are members of the associations. They establish and administer rule and regulations for the credit card industry. this encompasses Visa, Mastercard, American ExpressAn organization that issues cards and acquires transactions, unlike Visa and MasterCard, which are bank associations., and Discover. The card associationsVisa and MasterCard are members of the associations. They establish and administer rule and regulations for the credit card industry. create the interchangeThe exchange of debit and credit transaction data between merchant banks and cardholder banks based on an agreement (governed by BASE II [VISA] or INET [MasterCard]) between the participants. The fees charged by the Issuer to the Acquirer. rates and set the qualificationA level at which a transaction interchanges. Level of qualification is dependent on how the credit card number is entered, how quickly a transaction is settled, the type of industry, specific information, etc. guidelines. They act as the mediator for issuing banks and acquiring banks.
Credit Card Processing Steps
Credit card processing has three fundamental processes. It begins with authorizationThe request to charge a cardholder for goods or services. Authorization must be settled in order to post the authorization to the cardholder’s account. If not processed within a certain time frame authorizations will be cancelled. The time period is usually from 3-7 days.... of the transactionAn act between a seller and a cardholder that results in either a paper or an electronic representation of the cardholder’s promise to pay for goods or services received from the act. The action between a cardholder and a merchant that results in financial activity between the merchant and cardholder’s account..... The next step is the settlementThe process of transferring funds for sales and credits between Acquirers and Issuers, including the final debiting of a cardholder’s account and crediting a seller’s account. of the charges. The last step is funding the account.
The authorizationThe request to charge a cardholder for goods or services. Authorization must be settled in order to post the authorization to the cardholder’s account. If not processed within a certain time frame authorizations will be cancelled. The time period is usually from 3-7 days.... is the process of approving the transactionAn act between a seller and a cardholder that results in either a paper or an electronic representation of the cardholder’s promise to pay for goods or services received from the act. The action between a cardholder and a merchant that results in financial activity between the merchant and cardholder’s account..... It begins when the cardholder presents their card at a merchant’s place of business. The merchantA business that accepts credit cards for goods or services. sends a request for approval to the payment processorA large data center that processes credit card transactions and settles funds to merchants. A processor connects to the merchant on behalf of an acquirer via a gateway or POS system to process payments electronically. Processors edit and format messages and switch to bankcard networks. They provide files for clearing and settlement and other value-added services..... The payment processorA large data center that processes credit card transactions and settles funds to merchants. A processor connects to the merchant on behalf of an acquirer via a gateway or POS system to process payments electronically. Processors edit and format messages and switch to bankcard networks. They provide files for clearing and settlement and other value-added services.... submits the transactionAn act between a seller and a cardholder that results in either a paper or an electronic representation of the cardholder’s promise to pay for goods or services received from the act. The action between a cardholder and a merchant that results in financial activity between the merchant and cardholder’s account.... to the card association. This transactionAn act between a seller and a cardholder that results in either a paper or an electronic representation of the cardholder’s promise to pay for goods or services received from the act. The action between a cardholder and a merchant that results in financial activity between the merchant and cardholder’s account.... then goes to the issuing bank.
The issuing bank will either approve or decline the transactionAn act between a seller and a cardholder that results in either a paper or an electronic representation of the cardholder’s promise to pay for goods or services received from the act. The action between a cardholder and a merchant that results in financial activity between the merchant and cardholder’s account.... based on whether the cardholder has sufficient funds or credit. Transactions may be declined if the account is expired. The issuing bank then sends the approval status back to the card association and the merchantA business that accepts credit cards for goods or services. bank. This all takes place in a matter of seconds while the customer is at the payment terminalThe device by which a transaction is transmitted to the acquiring bank..
The next step is the settlementThe process of transferring funds for sales and credits between Acquirers and Issuers, including the final debiting of a cardholder’s account and crediting a seller’s account.. The processorA large data center that processes credit card transactions and settles funds to merchants. A processor connects to the merchant on behalf of an acquirer via a gateway or POS system to process payments electronically. Processors edit and format messages and switch to bankcard networks. They provide files for clearing and settlement and other value-added services.... reconciles the authorizationThe request to charge a cardholder for goods or services. Authorization must be settled in order to post the authorization to the cardholder’s account. If not processed within a certain time frame authorizations will be cancelled. The time period is usually from 3-7 days.... and submits the batchA collection of credit card transactions saved for submitting at one time, usually each day. Merchants who do not have real-time verification systems must submit their transactions manually through a POS terminal. Batch fees are charged to encourage a merchant to submit his or her transactions at one time, rather than throughout the day.... to the card association network. The processorA large data center that processes credit card transactions and settles funds to merchants. A processor connects to the merchant on behalf of an acquirer via a gateway or POS system to process payments electronically. Processors edit and format messages and switch to bankcard networks. They provide files for clearing and settlement and other value-added services.... deposits the funds into the business’s account and deducts the fees. SettlementThe process of transferring funds for sales and credits between Acquirers and Issuers, including the final debiting of a cardholder’s account and crediting a seller’s account. can sometimes take a few days.
The last step is funding. The funds are then deposited and fully available to the merchantA business that accepts credit cards for goods or services..
Credit Card Payment Pricing
Since there is so much work involved in the transactionAn act between a seller and a cardholder that results in either a paper or an electronic representation of the cardholder’s promise to pay for goods or services received from the act. The action between a cardholder and a merchant that results in financial activity between the merchant and cardholder’s account...., the people involved want to get paid. The payment processorA large data center that processes credit card transactions and settles funds to merchants. A processor connects to the merchant on behalf of an acquirer via a gateway or POS system to process payments electronically. Processors edit and format messages and switch to bankcard networks. They provide files for clearing and settlement and other value-added services...., merchantA business that accepts credit cards for goods or services. bank, issuing bank, and credit card association all charge a small fee.
There are four main fees that are typically bundled into the credit card transactionAn act between a seller and a cardholder that results in either a paper or an electronic representation of the cardholder’s promise to pay for goods or services received from the act. The action between a cardholder and a merchant that results in financial activity between the merchant and cardholder’s account..... The issuerA bank that issues credit cards to consumers. gets a percentage of the sale called an interchangeThe exchange of debit and credit transaction data between merchant banks and cardholder banks based on an agreement (governed by BASE II [VISA] or INET [MasterCard]) between the participants. The fees charged by the Issuer to the Acquirer.. The credit card association charges a fee called an assessment. The merchantA business that accepts credit cards for goods or services. bank takes their cut by charging a percentage. The payment processorA large data center that processes credit card transactions and settles funds to merchants. A processor connects to the merchant on behalf of an acquirer via a gateway or POS system to process payments electronically. Processors edit and format messages and switch to bankcard networks. They provide files for clearing and settlement and other value-added services.... charges an authorizationThe request to charge a cardholder for goods or services. Authorization must be settled in order to post the authorization to the cardholder’s account. If not processed within a certain time frame authorizations will be cancelled. The time period is usually from 3-7 days.... fee.
The percentages are all added together and quoted as a single rate. Companies quote the transaction feeA fee charged for each transaction processed by the merchant. This is in addition to the percentage discount fees. separately. For example, 2.9% plus $.30.
Since hardware store margins can often be razor-thin, hardware store merchants must negotiate with every vendor or supplier to be profitable. Their dedicated research could help them find the credit card payment processorA large data center that processes credit card transactions and settles funds to merchants. A processor connects to the merchant on behalf of an acquirer via a gateway or POS system to process payments electronically. Processors edit and format messages and switch to bankcard networks. They provide files for clearing and settlement and other value-added services.... with the lowest processing fees since there is the risk of running into a wide range of those fees in the process.
The most important thing to consider is the volume of sales versus your per-sale dollar amounts. If you have a high volume of low-dollar value sales, you will have different needs than if you have higher value sales. Selecting the right payment processing structure is key to your success.
Hardware eCommerce shopping
Many brick and mortar hardware stores have an online store to accommodate more customers. This online presence attracts individuals who like to do their research from their computer. They can easily reference their home appliance numbers or parts they need and enter them into the computer to see if it is available at the hardware store.
For online shoppers, paying with a credit or debit card is essential. Hardware stores must have a merchantA business that accepts credit cards for goods or services. account set up for online purchases. Industry standard protects all personal information from each credit card transactionAn act between a seller and a cardholder that results in either a paper or an electronic representation of the cardholder’s promise to pay for goods or services received from the act. The action between a cardholder and a merchant that results in financial activity between the merchant and cardholder’s account.... through end-to-end encryption.
Hardware Store Delivery Services
To keep a competitive advantage, small hardware businesses started providing delivery of their products for all projects big and small directly to their home for a fee. This is extremely convenient for the customer that doesn’t have a truck to haul construction materials home, but may be interested in a DIY deck project.
Customers who want to have services delivered to their homes will pay at the time of delivery. A mobile payment processing feature can enable home delivery type services for hardware stores making it so hardware stores may want to find payment processors that offer a mobile processing terminalThe device by which a transaction is transmitted to the acquiring bank..
Hardware Store Account Optimization
Hardware stores need to ensure the optimization of their account on every level. They must select the right payment processing structure and any other additions. They should do regular reviews of their merchantA business that accepts credit cards for goods or services. accounts to ensure that they aren’t overpaying on their credit card processing fees.
National Merchants Association works with members to meet your payment processing needs and optimize your account to ensure that your hardware store is profitable. They evaluate your account each month to ensure that you are paying the least amount possible. They also conduct quarterly account reviews to optimize your account.
Selecting a Credit Card ProcessorA large data center that processes credit card transactions and settles funds to merchants. A processor connects to the merchant on behalf of an acquirer via a gateway or POS system to process payments electronically. Processors edit and format messages and switch to bankcard networks. They provide files for clearing and settlement and other value-added services....
When choosing a credit card processorA large data center that processes credit card transactions and settles funds to merchants. A processor connects to the merchant on behalf of an acquirer via a gateway or POS system to process payments electronically. Processors edit and format messages and switch to bankcard networks. They provide files for clearing and settlement and other value-added services...., it is important to find one that Works For You(tm). They should be able to customize your payment processing solutions to meet your particular needs. You should select a payment processing service that provides excellent customer service, top-notch security, and has a proven track record of experience in your industry. National MerchantA business that accepts credit cards for goods or services. Association combines personalized service with industry experience to create a positive experience for your business. Visit National Merchant Association today to find out if it is the right payment processing for your business.