Money Matters

Why A Business Needs To Accept Credit Card Payments

accepting credit card payments

Today a business that wants to keep up has no choice but to offer credit cards as a method of payment.

It makes sense for any business to accept credit cards as form of payment. In today’s date and time, customers do not prefer to carry cash and prefer to make payments through cashless means such as debit cards and credit cards.

Consumers find payment by credit card’s most convenient not only because it is cashless but also because it gives them a certain grace period to pay what they charge. Which means they can buy something today that they can afford to pay for only later. That is the benefit of using credit and also its downfall.

Research and study shows that a consumer spends more easily when using a credit card. Credit cards increase the probability, speed and size of customer purchases. Also, customers do not prefer to carry cash when traveling long distance. Another reason why customers choose to pay by credit card is because it makes returns and exchanges with the merchandiser more easy.

Accepting credit cards has lots of advantages for business. It enables the business to increase the size of the average orders and make the customer buy multiple items when they do not have ready cash for it.

Accepting credit cards is preferable to accepting checks because you receive the money within a few days typically 3 to 5 working days as opposed to waiting for a check to clear. Finally, credit cards are safer and guarantee payment to you without the risk involved in accepting bad checks.

If your business is a sizable business, you may consider issuing a private label credit card with your companies name. Since you already accept major credit cards such as MasterCard, Visa, Americans express and discover, your private label credit card program will help the business focus on who the consumers are.

You would be able to gather data regarding customer purchases, buying patterns, income and demographics. Small businesses can save money by using an outside administrator that specializes in private label credit cards. Your credit card is not much different and you will still be using providers such as, Visa and American Express. A large number of banks have entered this arena and you can ask your banker if they offer such programs.

Get recommendations of private label credit card administration company if your bank doesn’t provide this service.

Administration companies can do everything from setting up operations to developing specialized marketing program, designing the credit card, training employee’s and developing lists of potential customers.

Before choosing an administration company you can talk to the business owners who use private-label credit cards to see if they are happy with the particular service.

Weigh the cost of running your own credit card against the benefit that you’re going to get from it. Usually larger corporations benefit from issuing their own private label credit cards, rewards cards etc.

Once you have been approved for a merchant account, make the best use of it to the maximum advantage of your business. Credit card companies and bank industries hold several seminars and user conferences which cover the latest in the industry, from fraud detection techniques and other helpful subjects that can make your business more secure, grow and become more profitable.

You can also keep track of various promotions and discounts run by your bank and your credit card companies. Keep in touch with the sales representative of the credit card company to be aware of the latest rates and deals.

For example, several banks and credit card companies offer interest free installment payment of a large purchase if the customer happens to be using the credit card issued by that particular bank or a particular credit card company.

Once you have a merchant account approved by the bank and are technically ready to accept credit card and debit card transactions, buying the right equipment is not so difficult.

Although the simplest form of processing a credit card payment involves getting a phone line and a card imprinter, you are advised to get the electronic credit card machine. Almost no one uses the credit card imprinter now even though it costs less than $50.

Buy A Credit Card Processing Machine

Electronic terminals and machines processes credit cards more securely and ensures that you get a better discount rate as well as you get the money in your account faster. 

Just as importantly, having an electronic credit card processing machine means that the credit card can be approved or denied instantly. With a credit card imprinter you have to present the receipts and slips to the bank which could mean that more payments could be denied due to various reasons. It is also a more secure way of accepting credit card payments and prevents credit card fraud more effectively.

Another advantage of using a digital credit card processing machine is you can use cash registers in tandem with the checkout terminal, maintaining a more streamlined account of the sales.