In 2017, credit cards were used more than 40 billion times in the US alone.
If you’re a business that doesn’t accept credit cards you’re missing out. There are plenty of benefits for both you and your customers.
If you want to know how to accept credit cards at your business, then we’ve got you covered.
Read on to learn more.
Why Should You Accept Credit Cards?
Before we get into the detail of how you can accept credit cards, it’s worth understanding the reasons why. Here are some of the benefits.
The more different types of payments you accept, the more sales you can make. If someone wants to pay by credit card, and you don’t offer that option, then you’ll miss out on a sale.
Many customers will prefer to pay by credit card for different reasons. It may be that they can earn rewards or cash back if they use their credit card, or they may just need to kick the payment further down the line.
More Choice for Customers
The more options you give customers, the better. If a site or store only offers limited payment options, and their competitor offers more choice, then the competitor is likely to get more business.
You should give customers as much choice as possible if you want to maximize the potential of your business.
If you only accept cash payments, you’ve got to get that cash to the bank somehow and keep it in your store throughout the day.
That means you’re opening yourself up to a lot more risk. If someone breaks in or tries to take your cash when you’re on your way to the bank, you could end up losing a small fortune. With credit card payments, there’s nothing for anyone to steal.
You also don’t have to worry about any of your staff lifting money from the cash register, either.
Taking money to the bank, paying it in, filling out your receipts, and recording your cash sales are all time-consuming processes.
With credit card payments, the whole transaction is done in seconds. The payment will end up in your account, a receipt will be generated, and some systems can even upload the transactions to your accounting software of choice. All of this will save you a lot of time in the long run, and as we know: time is money.
Online Credit Card Payments
If your business is online-only, then accepting credit card payments is fairly simple.
You’ll need a few things set up on your website. You’ll need a shopping cart first of all so that users can make multiple purchases. You’ll then need a payment gateway, which is the service through which your customers will make their credit card payment.
There are plenty of payment gateways to choose from. Popular choices include Paypal, Square, Venmo, Shopify, and more. Each of these gateways come with their own specific fees. Most of these are in the range of 2.7 to 2.9 percent of the transaction, plus a fixed fee of anything up to about $0.30.
Integrating these payment gateways into your website is simple to do, and if you choose one of the big names you know that your customers will trust the gateway for making a purchase.
One issue with online payments is that you may have issues with cards that are declined. This a particular issue if you offer a subscription service. In this case, you’ll need good dunning management in order to chase up any failed payments.
In-Person Credit Card Payments
If you’re going to accept payments in-person, things are a little more complicated as you’re going to need some additional hardware.
You’ll need a point-of-sale (POS) system in order to process credit card transactions. This will include a card reader that the customer will use to make their payment, as well as the software to process the transaction.
Alternatively, you can use a mobile phone combined with a card reader to replace the traditional POS system. This is particularly useful if your business doesn’t use a permanent location; if you sell from market stalls or a food truck, for example. Since the system only requires a phone signal, you can use it almost anywhere.
With this equipment in place, you have all the physical hardware that you need to accept credit card payments, but you’ll still need someone to process the payment.
Merchant Accounts vs. PSPs
The traditional way of accepting credit cards is to set up a merchant account.
This is basically a business bank account that is set up to handle your credit card payments. The money goes into the merchant account and then is transferred to your account, minus any fees. You can find merchant accounts with banks, payment providers, and independent businesses.
There will usually be significant set-up and equipment fees, and you’ll almost certainly pay monthly fees too.
Payment service providers are all-in-one businesses that handle all of the payment processes. Paypal and Square are examples of PSPs; these companies don’t require you to set up a separate merchant account to handle your payments. The payment structure is usually simpler to understand too.
Which you choose is really personal preference; for small businesses, the lower set-up costs of PSPs could make them a better choice.
Are You Ready to Accept Credit Cards?
We hope that this article has given you some insight into why you should accept credit cards and how to go about it. Credit card payments offer a range of benefits for both your business and your customers, so if you don’t accept them, it’s definitely something to consider.
If you’re looking for more great content, please be sure to check out the rest of the site.
Related content from StrategyDriven