Before the internet, cash was king for retailers and small business owners. However, in the age of digital economy, businesses have to keep up with their customer’s payment preferences, which include digital wallets and credit card payments.
In the Philippines, only 8.09 percent of the population uses credit cards. While this is low compared to the global average of 22.26 percent, shoppers that do have credit cards maximize their cards’ use. In fact, the Credit Card Association of the Philippines (CCAP) reports a 47 percent surge in gross billings amounting to PHP 410 billion in the first three months of 2023. Moreover, credit card charges accounted for 40 percent of consumer loans, according to reports from December 2022.
Indeed, Filipino consumers armed with credit cards likely turn to their cards for household spending. Reasons include a card’s convenience, flexible payment terms, and enticing rewards provided by issuing banks.
For new entrepreneurs, however, accommodating credit card payments from customers means having to find a reliable credit card processor. With all the necessary business permits and Bureau of Internal Revenue (BIR) requirements they’ll have to accomplish on top of that, it’s understandable for new business owners to be trepidatious about the process.
Fortunately, payment solution providers like Maya Business, which caters specifically to small and medium-sized enterprises (SMEs) and startups, can make the enrollment and onboarding process much easier for entrepreneurs. As one of the first innovative financial technology or fintech companies in the Philippines, Maya has rolled out an intuitive card payment machine that accepts credit card, digital wallet, and QR payments in one compact unit called the Maya Terminal. As more than just an ordinary credit card terminal, it serves as an all-in-one digital payment and card swipe machine.
Are you ready to boost your sales and bolster your business’s reputation by accepting credit card payments? Here’s a brief guide on the basic process for doing so.
Qualifications Required to Apply for a Merchant Account
First, it’s important to understand the specific qualifications required of businesses by banks in the Philippines. While these requirements may vary slightly depending on the bank or payment processor you choose, some common factors for approval of a merchant account include the following:
- The business’s legitimacy
- The business’s track record for financial stability
- The business’s credit history
- The business’s industry risk assessment
To be eligible for a merchant account, your business must be legally registered and possess the necessary permits and licenses to operate. In addition, your bank will want to ensure that your business is financially stable enough to meet the obligations that come with their program. You will typically need to prepare evidence of a solid credit history and other proof of your ability to manage debt responsibly.
It’s worth noting that certain industries are considered a higher risk by banks and payment processors than others. For instance, businesses that are involved in online gaming or adult entertainment might face stricter qualification standards from their banks. However, don’t let this discourage you; many banks and processors offer solutions for a wide range of industries, and it’s just an issue of finding a match for your particular industry.
A Step-by-Step Procedure to Accept Credit Card Payments
1) Research and Choose the Right Payment Processor
To begin, do your research on various payment processor options available in the Philippines. Compare their features, transaction fees, and customer reviews, and take note of specific advantages they’ll afford your business. To illustrate, Maya Terminals are fully integrated with a point of sale (POS) system, and this credit card POS makes checkout a breeze for both customers and businesses.
2) Prepare All the Necessary Business Documentation
Next, gather all your essential business documents—such as your business registration, licenses, and financial statements—to forward to your partner bank or processor. These documents will prove your business’s legitimacy and financial stability.
3) Fill In the Application for a Merchant Account
Lastly, complete the merchant account application form provided by your chosen payments partner. Alongside the form, submit all the required documents. Wait for your application to undergo a review process from your payments partner.
Streamlining Your Business for Credit Card Payments
From what you may have gathered above, your business will need to be ready to meet certain obligations before opening a merchant account and accepting card payments. Here are some tips for streamlining your business for card payments and easing your staff into the transition:
1) Set Up Your Payment Infrastructure
For physical stores, you’ll want POS systems with card readers. With the Maya Terminal or Maya Terminal Lite, this can be easily done with the device’s built-in POS app.
Online businesses will need to integrate secure payment gateways onto their website. Find a reputable payment gateway solution to install so that you can receive customer payments from your e-commerce site without a hitch.
2) Put Security Measures in Place for Customer Protection
Whether your customers will be transacting with you online or in your physical store, you’ll want to make sure that they don’t fear their cards getting compromised. Invest in a credit card device that’s ATEX-certified, EMV-certified, and PCI-DSS-compliant for your brick-and-mortar store. For your e-commerce site, protect your customers’ data through encryption and Secure Sockets Layer (SSL) certificates. Tokenization will also add an extra layer of security to each transaction by replacing sensitive card information with tokens.
3) Train Your Staff in the Use of the New Technologies and Systems
Once you’ve opened your new account and onboard the requisite technology to accept card payments, educate your employees on using the payment systems, processing transactions, and handling refunds or chargebacks. A well-trained staff will contribute to a seamless customer experience and increased customer loyalty for your brand.
4) Display Your Accepted Payment Methods in Your Store
Make sure to clearly display all accepted payment methods in your physical store or on your website’s checkout page. This will instill confidence in your customers and encourage them to complete their purchases using their card of choice.
Takeaway: Maximizing the Benefits of Accepting Credit Cards
Your pursuit of a card payment system for your business will expand your market reach and potential revenue streams, especially among international customers and tech-savvy millennials. You may also see an improvement in your average transaction values, as the option to pay through a card can lead to higher spending on the part of customers. This means that you can make more from cross-selling, upselling, and motivating your customers to spend for rewards points.
Now that the average Filipino consumer has become increasingly reliant on cards and other cashless payments, it may be time for your business to align with customer preferences and implement its own card payment system. Consider partnering with a trusted payment solutions provider like Maya Business to build a robust cashless payment system for your SME or startup.