How to accept in-person payments in 5 easy steps

Last updated on May 13, 2024

Setting up a system for accepting in-person payments is an important step for any new brick-and-mortar business. It’s not just essential for facilitating sales transactions, but also for managing inventory, understanding sales data, and establishing a foundation for accurate accounting and reporting. 

The bulk of the work involved in setting up in-person payments is the upfront research and decision-making. Once that's complete, installing your point-of-sale machines and accepting your first card payment is a relatively quick and straightforward process.

What are in-person payments?

In-person payments are financial transactions where the seller and the buyer are physically present at the point of sale. These face-to-face payments are conducted in physical business locations, such as retail shops, restaurants, and hotels, as well as at mobile or temporary venues, such as paying for in-flight concessions while aboard an aeroplane, street vendor purchases, and taxi fares.

Types of in-person payments

- Credit and debit cards

Card payments are currently the most common form of payment across North America and Europe and continue to evolve to meet the evolving needs of today’s consumers. Cards work using a variety of technologies, including:
- Contactless technology, which allows cardholders to make payments by tapping their cards on the card terminal.
- Chip and PIN, which requires cardholders to insert their card into the terminal and enter their personal identification number for security.
- Magstripe, which requires cardholders to swipe their card and, in some cases, enter their PIN or sign to verify their identity. 

- Digital wallets

Digital wallets like ApplePay, GooglePay, SamsungPay, AliPay, and WeChat Pay use near-field communication (NFC) technology to allow customers to pay by tapping their mobile phones or smartwatches on the card terminal. Used for both in-person and online payments, digital wallets are rising in popularity across the globe and are the preferred in-person payment method for consumers in several countries, including China and India.

- Cash 

Despite the popularity of cards and digital wallets, cash remains a common in-person payment method in many retail environments across the world. It’s a particularly common option at stores and shops where quick, low-value transactions are the norm (e.g. coffee shops, convenience stores, etc.). Cash also requires no processing infrastructure or fees, making it a popular option for small, independent vendors with limited Internet access and a preference for immediate payment (food trucks, landscaping, barbers, etc.).

- Cheques

Once a popular form of payment, paper cheques are much more rare in today’s digitised economy. However, in certain countries, including France and the United States, they are still used by consumers and accepted by certain establishments.

Step 1: Choose a payment services provider

Before you can start taking card payments from your customers, you must choose a payment services provider or merchant services provider.

In the excitement and rush of opening your storefront, it’s tempting to pick the first provider you find. However, taking the time to carefully consider your options and establish a payment platform that suits your specific needs (and that of your customers) will pay off greatly in the long run.

There are many factors to consider when choosing a provider, including:

1.1. Costs and fees

There are a variety of fees associated with taking card payments, including:
- Processing fees
- Interchange fees
- Annual/monthly service fees
- Setup fees
- Equipment costs

Consider these fees carefully before entering into an agreement with a payment services provider. Run the numbers against your current or projected sales figures to make sure you have an accurate estimate of what you’ll be paying for payment processing each month.

1.2. Security and compliance

Before settling on a payment services provider, review the payment security measures they offer and ask to see evidence of their compliance with data security standards, most notably the Payment Card Industry Data Security Standard (PCI DSS). Ask potential providers about how and where sensitive cardholder information is transmitted and stored. Determine which aspects of PCI DSS are covered by the provider and which, if any, components you are expected to manage.

In addition to data security compliance, research the different card security measures each provider has in place for in-person payments. Although card security measures are typically discussed in the context of online payments, brick-and-mortar merchants must also do all they can to protect their customers from fraud. 

1.3. Scalability and future-readiness

Think about how your business might expand and grow in the future. Do you see yourself opening new locations? Is there the potential for you to add an online component to your business? Is there a chance you would like to add delivery services, online booking services, or subscription-based services? Do you plan to expand internationally one day and need to accept foreign payment methods?

Asking yourself these questions will help you find a payment services provider that not only meets your current needs but also the needs of your business as it grows and expands over the years.

1.4. Industry expertise

If you were hiring for an important role at your business, you would never choose a candidate who has zero experience in your industry, regardless of how impressive their CV is. The same logic applies to choosing a payment services provider.

When narrowing down your options, look for providers that understand your specific sector. Ask potential providers for examples of how they’ve supported other businesses in your industry and whether they have any case studies outlining their work. 

1.5. Reviews and reputation

As part of your research into payment service providers, consider how long the company has been doing business, read reviews from customers, and investigate which accrediting bodies they belong to. Although online reviews can be skewed and don’t always represent a business accurately, do what you can to get a better understanding of each provider’s reputation within the payments industry. Use this information to make a more informed decision. 

1.6. Customer service support

Last but certainly not least, choose a merchant services provider that’s available and responsive to your customer service requests. In the event that you need to troubleshoot an issue with your card terminals, or ask for help with system updates, you’ll want a provider that will quickly and effectively attend to your concerns. 

Top tip: Choose a payment service provider that assigns you a dedicated account manager, provides support in your local language, and is available for real-time assistance 24/7. 

Step 2: Create or apply for a merchant account
Once you’ve chosen a merchant services provider, submit an application form for a merchant account. As part of this process, you’ll likely be asked the provide basic business and financial information, including: 
- Business name, incorporation documents, tax ID, etc.
- Historic financial reports, balance sheets, forecasts, etc.
- Operational details, including business location and types of products/services you plan to sell.

Most merchant account applications are approved within a few days, or even quicker. However, if your business is considered “high risk,” it can take several weeks. High risk businesses are typically those associated with high chargeback rates (e.g. betting agencies, adult entertainement businesses, pawn shops, etc.).

When your merchant account is approved, you’ll be given access to online account (often referred to as a “merchant dashboard”) where you can view transaction reports, manage refunds, monitor chargebacks, and analyse sales data. You’ll also be set up with a merchant ID, a unique 15-digit number that links each customer payment to your merchant account, ensuring all funds arrive at the right place.

Step 3: Customise your payment options
Once your merchant account is up and running, work with your service provider to customise your payment system to suit the needs of your business and your customers.

There are many ways to tailor your payment platform, including:

3.1. Choose which payment methods to accept

- Card payments 
Decide which card networks (Visa, Mastercard, Discover, American Express, JCB, UnionPay, etc.) you want to accept, taking into consideration your customers’ preferences and the associated costs for each card scheme. 
- Digital wallet payments
Consider whether you’d like to give your customers the ability to make quick, mobile payments using popular digital wallets like Apple Pay, Google Pay, Samsung Pay, and PayPal. If your business attracts many tourists, consider international wallets such as AliPay, WeChat Pay.
- Cash payments
If you plan to accept cash payments, make sure you use a till system that can manage cash payments as well as digital and card payments. This will allow you to provide the correct change and record cash revenues using the same, integrated system that you use for other payment methods.

3.2. Integrate booking and client management tools

For hospitality and service-based businesses, integrating your booking platform and client relationship management software (CRM) into your payment platform will help simplify and streamline your operations. If you have an existing booking system, check to see whether it’s compatible with your chosen payments platform, or speak to your merchant services provider about switching to a fully integrated solution.

3.3. Incorporate tax-free shopping solutions

If your business is located in a country with a tax-free shopping scheme for tourists, you can draw more customers in by offering simple VAT refund processing at the point of sale. These integrated tax-free shopping solutions make it easy to complete and issue the required tax-free forms on behalf of your customers directly from your electronic point of sale (ePOS) machines.

3.4. Add dynamic currency conversion

Consider whether you would like to give your customers the ability to pay for your goods or services in their local currency with integrated, dynamic currency conversion at the point of sale. This feature is ideal for hospitality and retail businesses that cater to tourists and is easy enough to add to your payment platform as long as you have a service provider that offers it. 

Step 4: Install and test your point-of-sale machines

Once you’ve customised the backend of your payment system, it’s time to switch on your card terminals or point-of-sale and start taking payments.

Here’s an overview different types of hardware you may need depending on the nature of your business. 

4.1. Countertop payment terminals

These card machines are designed for businesses with a fixed point-of-sale location, such as a dedicated checkout counter. They are typically hardwired to a separate till system that records each transaction and handles cash payments. These machines work perfectly for businesses like supermarkets, pharmacies, and pay-at-counter retail shops. 

4.2. Mobile payment terminals

Accept card payments “on the go” without needed to be tethered to a electrical socket or larger till system. These machines are ideal for restaurants and retail businesses with roving sales personnel (e.g. shoe shops) where customers prefer to pay on the spot, rather than walking to a separate checkout counter. Mobile terminals are also the perfect solution for businesses that don’t always have access to electricity, such as food trucks or outdoor market stalls. 

4.3. Point-of-sale (POS) 

Point-of-sale systems are advanced systems that go beyond payment processing, integrating features like inventory management, booking management, and customer relationship management. These systems are ideal for hospitality and retail businesses that want to streamline their operations and take their customer service to the next level. A sophisticated POS system is able to consolidate many different business operations into a single, user-friendly interface and is the pinnacle of modern retail and hospitality management technology.

4.4. Unattended terminals and kiosks

These payment terminals allow your customers to make payments completely unassisted, without you needing to be present at all. Customers simply walk up to the kiosk, enter any required information (e.g. parking spot number) and make the payment themselves. These robust machines are the perfect way to accept payments for parking, transportation (e.g. trams or underground tickets), and fast-service environments (e.g. fast food restaurants with touch-screen, self-service ordering ).

Top tip: Work with your payments provider to determine which hardware best suits your business and your budget. Your provider will also assist you, either in person, over the phone, or through digital guides and videos, in setting up your machines once they arrive.

Step 5: Start accepting payments!

With your payment system set up and tested, you're ready to start accepting in-person payments. Continue to monitor your system's performance and stay in touch with your service provider to ensure any potential issues are swiftly addressed. As your business grows, keep evaluating your payment processing needs and update your system accordingly. 


How can I manage cash payments and card payments in one place?

The best way to manage your in-person cash and card payments in one place is to use a comprehensive point of sale (POS) system. These sophisticated machines can include a till screen and drawer for cash payments while connecting to a card reader for card and digital wallet payments. All sales data flows into the same merchant dashboard, ensuring your sales reports and analytics account for all transactions, regardless of the payment method.

How often do I need to update my card machines?

Keeping your card machines updated is crucial to ensuring they remain secure and functional. Software updates are often released multiple times a year. These updates usually contain bug fixes and security patches, so be sure to run them as soon as they become available (your provider will keep you informed of these). Hardware updates are less frequent and necessary, but you can expect to upgrade your card terminals and tills every 2 to 4 years. 

Do card machines need the Internet to work?

Although the majority of modern card machines require an Internet connection to work, there are certain machines that can operate in an “offline” mode, storing sales information to be processed later, once connectivity is restored. Taking payments in offline mode isn’t always recommended, however, as you will not be made aware of any unsuccessful transactions until you’re connected to the Internet again. This makes rectifying these failed transactions very difficult, if not impossible. 

The latest card machines do connect to 3G, so if your WiFi goes down, you have a backup option.

How secure are in-person payments and card terminals?

Modern in-person payment systems leverage the latest technologies and industry-standard security protocols established by card networks to safeguard data and prevent fraud. These measures include:
●    Encryption and tokenisation to ensure sensitive cardholder data is cloaked and transformed so that bad actors cannot decipher it. 
●    EMV chip and pin technology that, unlike magnetic stripe cards, uses a unique code for each transaction rather than creating a digital record that can be stolen and used for multiple payments.
●    Contactless payment limits that prevent fraudsters from using a stolen card to make high-value transactions. 
Although, for most current card machines, there is little that can be done to prevent someone from using a stolen card to make small, contactless payments, the next generation of card terminals will likely use biometric technology (e.g. facial or fingerprint recognition) to authenticate transactions. This advancement will significantly reduce instances of card fraud for in-person payments. 

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