Store and restaurant customers pay with credit cards more frequently each year. Nonetheless, at least two out of every five small businesses don’t accept them. Owners have various pretexts for avoiding this payment option, but many of these reasons are unfounded and don’t hold true.
The decision to accept credit cards could complicate the flow of business, but it doesn’t have to. For instance, a power outage may become more disruptive if customers who normally pay with cards come in to make a purchase and don’t bring cash. But businesses can address this problem by using mobile payment processing from a phone or tablet that doesn’t require power.
Some business owners also worry about how they will manage and keep track of credit card transactions. They think by accepting credit cards that bookkeeping will become more difficult as they will now have to manually record credit card sales. Quite the opposite. Sophisticated POS equipment can automate transaction records and reduce these burdens. Modern POS systems can even monitor inventory levels allowing the business owner more time to run and grow the business.
New Equipment and Training
One major thing keeping small business proprietors from wanting to accept credit cards at their business is the added expense of paying for point-of-sale equipment. Though some companies still charge upwards of $500 to $1,000 for a POS system or demand monthly leasing fees, it’s now possible to acquire no-contract credit card processing equipment from a reliable merchant service provider at no cost.
Busy shopkeepers and restaurateurs may also hesitate due to the investment and time it takes to start accepting credit cards. Learning to operate the new equipment and train employees may seem like an unwanted task. Nonetheless, the automated accounting and inventory-tracking features save both time and money in the long run.
When a business accepts a credit card payment, the processing service normally charges a small interchange fee. Costs vary depending on the payment size and card issuer. One thing to consider is that debit cards have significantly reduced processing fees and Americans use them more frequently than credit cards.
Though you can’t get around paying these small charges, the cost of not accepting credit card payments is much greater. Think about the missed sales and potential customers you would turn away by only accepting cash at your business. Business owners who accept credit cards typically benefit from greater sales revenue as well.
Some businesses choose to compensate for credit card processing fees by increasing the expense of their products or requiring the fees be paid by the customer. While this is surely an option, you will want to evaluate whether or not this is right for your business.
Slow Checkout Lines
If a company serves customers who have little time to spare, the owner may worry about losing business by accepting credit cards. Customers may need to wait while fellow patrons sign receipts, and some POS machines take a long time to process transactions. However, businesses can now obtain faster equipment, and signatures aren’t always necessary.
Credit cards also expedite the checkout process in many ways. No one needs to write checks, show identification or count change. Furthermore, the latest technology has provided new ways to eliminate checkout lines altogether. Mobile processing enables employees to accept payments from almost any location.
Where’s My Money?
Companies may wait longer to receive the money from credit card transactions as it can take days for cash to become available for withdrawal. This is problematic if a bill comes due in the meantime. The good news is that merchant service providers are granting quicker access to funds; they often cut waiting times to less than three business days.
Although counterfeit money and checks with insufficient funding can cause serious problems, some business proprietors oftentimes fear credit card fraud more. If a customer pays with a credit card they could lose inventory and funds. There is also the worry of a chargeback if the customer is unsatisfied.
Nevertheless, the reality is that these problems seldom have a major impact if businesses take precautions. New chip cards make it far more difficult to commit fraud, and less than one out of every 1,000 in-store transactions result in chargebacks.
Despite various concerns, many small businesses gain much more than they lose by accepting cards. Study results reveal that customers usually make significantly larger purchases on credit. They also tend to buy more products impulsively and post more positive reviews on the internet.
Global card-based spending surpassed cash purchases in 2016, so it’s increasingly vital to accept credit and debit payments. Business owners can avoid many of the above-mentioned problems by choosing a dependable merchant services company that provides great customer service, top-of-the-line equipment, and a myriad of additional services beyond just credit card processing.