Accepting Credit Cards

Today there are hundreds of thousands of small & medium size businesses in this country that take orders via credit cards. In many cases they are “taking the plunge” to accept credit and debit cards for the first time. To help you start your homework, let’s look at the advantages of accepting credit cards for your business.

6 Benefits of Accepting Credit Cards

1. Convenience – You probably already know that accepting alternative forms of payment like credit and debit cards helps make it more convenient for people to pay you.

2. Increases Your Credibility – Did you also know that advertising your acceptance of credit and debit cards increases your credibility? “Hmmm…doesn’t accept credit cards? 3. Increases Your Average Sales Order – Were you aware that you’re AVERAGE SALE AMOUNT GOES UP when you accept credit cards? Human nature seems to cause most of us to be inclined to purchase the “better model or service upgrade” when we can finance the purchase with a credit card.

4. Impulse Purchases Go Up – Did you also know that your willingness to accept credit cards also causes impulse purchases to go up? Customers are more likely to purchase when they can use a credit card versus paying with cash or a check.

5. Increases Cash Sales – I bet you didn’t know that the mere presence of credit card logos at your business location increases CASH sales. This scientific experiment documented that the mere presence of Master Card/ Visa logos will increase cash sales by as much as 29% in controlled studies – even though credit cards were not used! If your business accepts cash, this is an extra bonus of accepting credit cards and advertising that you do.

6. Cuts Back on Bad Checks and Collection Costs. –By accepting credit and debit cards through a reputable Merchant Account Provider, credit cards orders will be screened for fraudulent transactions. Some providers, like Cardservice International, will take extra steps on address verification, verifying the extra four digits on the credit card, and blocking selected credit card numbers, Internet protocols, names or addresses. When a customer is a “slow pay”, a common collection technique is to call the customer and suggest they give you their credit card information over the phone right then to clear up the default. Disadvantages of Accepting Credit and Debit Cards

Like anything else, the benefits of increasing sales and profits by accepting credit and debit cards do not come without some risks. Sure, one disadvantage is that you have to pay a percentage of the sales that are paid to you with a credit or debit card in rates and fees. 1.) Chargeback Risk – The customer who paid you with a credit card has up to six months to dispute the charge. Should you decide to give the customer a credit than you will typically pay your Merchant Account Provider the same rates and fees that you paid when you accepted the charge – even though the money is flowing OUT of your account.

The customer may not call you at all.

In any event, the customer has the right to dispute the charge and write a letter to the bank that issued them the credit card they paid you with. The bank will contact the Merchant Account Provider who will then contact you to “retrieve” the signed receipt or possibly other evidence of the sale. The Merchant Account Provider may “charge back” the amount, which also has a fee of $10 or more. 2.) Your Money Can Be Held Back By the Merchant Account Provider. When you filled out your Merchant Account Application you were asked the type of business you have, the monthly volume of sales you anticipate, and the average order size you anticipate. The reason Merchant Account Providers run a credit report on you and are concerned about your business type and sales volume is because ultimately the Merchant Account Provider has to make good your charge backs if you are not able to.

Should you declare bankruptcy, not ship your product, provide your service inadequately, or even be running fraudulent credit card orders, the Merchant Account Provider could really be hurt. A Merchant (or the sales rep) may describe the business differently than it really is in order to get the Merchant Account Application approved more quickly. Spikes in your processing above your average daily approved sales volume estimate and much larger average order sizes than you were approved for will also concern the Merchant Account Provider. Trouble sometimes arises when a Merchant is stacking up credit card orders waiting for their Merchant Account to both be approved and setup properly. The lesson learned is to make sure your business description, monthly volume estimate, and average order size (or average ticket) are all correct. If you have more than one business make sure you set up each business properly and separately. The right kind of credit card terminal, as example, permits multiple Merchant Accounts.

Make sure you keep your Merchant Account Provider informed. Save yourself some headaches and call first for advice from your Merchant Account Provider.

You also may want to look at the cost of NOT accepting credit and debit cards. Never mind all the hype about “My sales increased 500% because I started accepting credit cards.” DO think about the likelihood of getting even just a few “extra” orders for your product or service because you accept credit and debit cards. What about the labor savings by converting to an electronic check service so you just enter the check information on the Internet. Add to that using credit and debit cards as a collection technique for your slow pays. The question becomes one of choosing the best method of accepting credit and debit cards – not whether to accept debit and credit cards for your business or not.

Start Accepting Credit Cards

Are you an accept credit card today kind of business? If not, this may be the time for you to check into opening a merchant services account. By learning how to accept credit card payments at your place of business or on a company Website, you can multiply profits and expand your client base. Here is how the process can be used to upgrade your business systems to better serve your customers and increase profit margins.

1. To accept credit card today transactions, you first need to find a banker or other financial underwriter who will extend you merchant account services. There are many such lenders who advertise their services on the Internet. The application process is easy. Just demonstrate that you have a good credit reputation, that you can afford to upgrade your business via a merchant account, and that you are not involved in shady dealings. You may be asked to pay an application fee, a membership fee, a gateway fee, a service fee, and other costs as well.

2. As you prepare to accept credit card today options, develop a plan for implementing the best type of equipment. For example, if you operate a restaurant or office supply outlet, you may want to purchase a terminal-printer credit card processor for your store to facilitate customers’ credit payments. If you operate a delivery service, you can buy a wireless unit so that credit payments can be made at delivery destinations like customers’ homes or at places of business.

3. Another way to upgrade your business so it can accept credit card today customers is to put up a Website, First, register a domain name so people can find you easily on the Web. With your merchant account, you can accept customers’ online credit payments any time of day or night from any location in the country or around the world. A merchant account can become your gateway to even greater success. Start browsing the Web now to find a financial underwriter who offers this service so you can get ready to accept credit card today customers who are ready to pay with plastic!