Why Should Your Business Accept Credit Card Payments?

What’s the most compelling reason for any business to accept credit card payments?

Because everyone else is doing it!

Yes… you probably can hear the echo of your Mother saying, “Just because everyone else is jumping off the bridge, should you do it too?” Well, in this case Mom, the answer is YES!

Accepting credit cards certainly has some negatives. When your customer pays in cash, you take in 100% of the sale. For your business to be able to accept credit cards, you’ll have to establish a merchant account with a credit card processing company and pay their processing fees. Most business owners consider these fees as a part of the cost of doing business. These fees vary widely, and depending on which credit card processor you choose, your fees could run anywhere from 1% to 4% per transaction, plus monthly fees, batch fees, terminal rental fees, and more. Businesses with medium- to high-ticket sales are better able to absorb these costs and continue to make a profit. But what if you own a high volume business selling a small ticket item? Each transaction fee eats into your profits. Will the benefits of accepting credit cards outweigh the cost?

But consider the pros of accepting credit cards.

Research shows that as many as 80% of Americans own at least one credit card and prefer to use it for some of their monthly purchases. The benefits of using a credit card to make a purchase are simple:

  1. Convenience. There’s no need to carry cash when you’re out shopping, and it’s just about the only way to make on-line purchases.
  2. Flexibility. You can take advantage of a great sale going on now and make payments over time.
  3. Security. As a benefit of paying by credit card, you now get a number of different consumer protections. For example, if you drop that package with your new crystal vase while putting it into the car, your credit card company may pay to replace it.
  4. Rewards. Why pay cash for a purchase when you can pay for it with your credit card and get points towards your next vacation?

As a merchant, you need to leverage these advantages for your business. When you accept credit cards in addition to cash and checks, you’re offering your customers the option to choose their preferred payment method. Why is that so important? Because the shoe store, or the grocery store, or the clothing store, or the furniture store, or the restaurant down the street that carries the same items or offers the same services as you is accepting credit card payments. In the final analysis, if you want to stay competitive, that’s the real reason why you should too.

Credit Card Processing: A Small Price to Pay for Piece of Mind

Credit card processing sucks. That’s probably a strange statement to make on the website of a credit card processing company, but we know it’s true because we talk to business owners every day. And every day, we see the same eye rolls and hear the same frustrated sighs that follow just about anything related to merchant processing.

Don’t worry… no offense taken. Credit card processing is frustrating. If feelings of rage and anger overwhelm you every time you think about it, you’re not alone. But before you hit the back button to avoid thinking about credit card processing, give us a chance to at least help you appreciate its benefits. Yes, the credit card processing industry is broken, and yes, some great companies (shameless plug alert: like Transparent!) are trying to fix it, but credit card processing itself is actually kind of amazing.

If “amazing” seems like too strong a word to describe something as seemingly mundane as credit card processing, maybe you need to look at your wallet again and consider, from a business perspective, your other options. In your wallet, wedged next to your credit cards and an old library card you haven’t used since two wallets ago, you probably have some pictures of famous dead people. You have to admit, compared to paper money, credit cards are… well… amazing. They’re slim rectangles of plastic that give consumers instant access to thousands of dollars in spending power without the kinds of problems that would come from carrying the same amount of dead presidents currency.

At first glance, business owners would prefer to accept paper because it doesn’t have any direct fees. No fees equals bigger profits, right? However, on closer examination, you can how spending money to accept credit cards ultimately dwarfs the money you’re at risk of losing when using an insecure payment mechanism like cash.

The savings from taking credit cards is rooted in costs of securing cash. If you own a public-facing storefront that accepts cash, chances are you have employees. Every one of them – even if it’s your favorite niece you hired for the summer – has had a thought that went something like this: “I wonder if anyone would notice a few missing dollars?” Sure, the vast majority of your employees would never act on that thought, but only one employee needs to act on it in order for you to lose more than credit card processing actually costs. Credit cards, whether you’ve given it much thought or not, are helping your business minimize the temptation of cash.

Before you start accusing all your employees of embezzlement, don’t forget the other employee-based cause of missing cash: human error. We’ve all made counting mistakes, and we’ve all put things in places we can’t remember. It happens from time to time, but when it happens with cash, there’s no 800-number to call to help you find the missing money. In comparison, not only is it harder to misplace an electronic deposit, we bet your credit card processor has an 800-number you can call if a deposit does happen to go missing. You can be sure Transparent does.

So the next time you see someone reach for a pile of paper presidents instead of a plastic rectangle, remember this: that cash might not come with any obvious fees, but it definitely doesn’t come with any guarantee to end up in your bank account.