With only 27 days in between Thanksgiving and Christmas this year, retailers have a shorter-than-usual window to capitalize on the holiday season. To supplement this, many are planning to ramp up efforts as early as October. To make the 2024 holiday season a breeze, implementing the right payment processing system into operations will make all the difference.

Payment processors are a dime a dozen in a crowded market and offer vastly different services, making it difficult for retailers to know they are using the best one for their business. But being equipped with the right tools, especially during the holiday season, can increase productivity, revenue, improve customer service and loyalty and much more. There are a few essential things to consider when utilizing a payment processor during the holiday season.

First, understand consumer payment habits and how they apply to the business offerings. In 2023, the National Retail Federation found that 47% of holiday shoppers used debit cards to pay for items, 35% used credit cards. However, 59% of shoppers also used alternative payment methods such as PayPal or Apple Pay, according to the same report. An ideal payment processor can accommodate each of these payment preferences to increase customer satisfaction. Likewise, Buy Now Pay Later (BNPL) practices are growing in popularity. Between November and December of 2023, consumers spent $16.6 billion with BNPL methods, according to Adobe Digital Insights.

With the majority of consumers opting for card payments over cash, swipe fees can restrain a retailer’s profits. In 2023, swipe fees from debit and credit card purchases reached a new record of $172.05 billion. Everyone from small town boutique retailers to big, brand stores all incur swipe fees for each transaction that eats into the revenue. To reduce or completely offset the high influx of processing fees during holiday shopping season, there is a simple solution that payment processors can offer to retailers. This includes incorporating the processing percentage, which is typically 4% of the total transaction, into the sale price and offering the original price to those who pay in cash. Also known as a cash discount program, these options incentivize consumers to pay with cash when possible.

Another point to consider going into the 2024 holiday season is that gift cards are the second most popular gift to give (44%), according to the National Retail Federation. Last year, consumers spent $30 billion purchasing gift cards as gifts during the peak season. Retailers should look for a payment processor that can successfully manage an influx of gift card sales.

Many retailers use multiple different management platforms, making operations convoluted and messy – especially during the November and December months. In addition to handling gift card sales, point of sale (POS) systems from payment processors can be used to manage customer loyalty programs, inventory, payroll, monthly reports, etc. Having an all-in-one system can alleviate operational pain points for retailers. However, not every business requires all the bells and whistles of a shiny new POS system, so an a la carte option can be appealing, too. Ultimately, allowing each payment system to be tailored to the needs of each individual business.

A 2023 study found the Gen Z population and Millennials are more likely to shop in person than their older generation counterparts. As the foot traffic increases for brick-and-mortar stores during holiday shopping, it can also be beneficial for staff to take POS systems with them around the store. A handheld POS terminal can decrease long lines and increase efficiency for both the business and shoppers, while still maintaining a traditional desktop terminal option at the checkout desk.

Likewise, retailers also need to optimize their payment services to meet the needs of those choosing to do their holiday shopping online. ECommerce sales are projected to increase9.5% in 2024. As Black Friday and Cyber Monday bring in a rise in sales, retailers can use a payment platform to swiftly manage and process the new orders.

Andy Williams’ classic holiday song says “it’s the most wonderful time of the year” but for retailers, it’s also one of the most hectic, busiest times of the year. It’s a time when payment processors and POS systems are truly put to the test. In an effort to excel in this year’s shopping season, retailers can optimize their payment processing services to best fit their unique needs and the needs of their customers.