Credit card payments are essential to every business nowadays since it provides convenience, added sales of more than 40% and it also helps business owners attract and retain more customers. Most merchants preferred to use a credit card as their main method of payment when selling goods or when they deliver services. Customers, on the other hand, are hesitant about giving out their credit card information due to several fraud cases and higher risks of identity theft. Still, credit card payment is the number one platform nowadays. Whether your business has a physical location or using an e-commerce site solely, accepting credit card is a great way to maximize your income potential. Some of the benefits of accepting credit card payment for business owners are;
- Accepting credit card will legitimize your business and will instantly build your business credibility. Merchants who display credit card logos such as Visa and Mastercard on their store or e-commerce store are creating a sense of trust in their customers. Once they know that credit card is being accepted when they enter your business facility or check out on their online purchase, it’s easier for them to complete the transaction with no doubt. They trust these companies big enough to manage their finances and that trust is being transferred to the merchants that accept it.
- It can boost your sales and attract many new customers. Compared to cash-only operations, businesses that accept credit cards will significantly widen your potential customers and can attract people of different class and lifestyle. On an average, it will increase your numbers by forty percent, that’s a significant figure to look forward.
- Promotes impulse buying. Your customers don’t need to wait for their paycheck to buy your product and services. They can easily swipe their credit cards and pay it on payday. They don’t care about interest rates and other credit card fees. That is how you can develop your marketing skills when they see your product as a “good buy” and ignores paying interest charges.
- It will help your business to stay in the competition. Your competitors already offer credit card payments. You need to give the same level of service and get that sale.
- This method of payment promotes convenience to your buyers. Customers need to have payment options. Most customers preferred to pay using their credit cards to eliminate bringing extra cash and to manage their cash flow. When they pay using their credit card, funds are processed electronically, no need for receipts and paper-bills since most banks promotes paperless billing now. Most credit card companies also present rewards and benefits to encourage them to use the card regularly.
Here are the things that you need to prepare and to keep in mind before processing credit card payments on your business.
Open a business bank account. Every business should have its own bank account. This way you can manage the income flow wisely and separate profits from expenses. You should have a detailed record of deposits and withdrawals each day. Have a separate checking account that you will use to pay suppliers, materials, and miscellaneous expenses. You will also need a checking account for credit card remittances. Once you launched this method of payment, be prepared for additional capital since your customers will get your product or services first, use their credit cards to pay you, their bank will process it automatically, called ACH process, and your bank will accept the payment and deposit it to your business account. But there are processing and clearing days so you will not be able to withdraw immediately.
Compare credit card processing fees. Before you introduce credit card payments to your clients, kindly check the market first and look attentively at what each merchant provider has to offer. There are annual fees, processing fees and transaction fees that you have to shoulder. You can decide if how much additional payment you will charge your customers if they will decide to pay using their credit cards. On the average, credit card transaction fees range from 2.5% to 3% each $100 transaction. Before making the decision, you might want to consider the best merchant services companies who present the lowest price possible.
Choose the right credit card equipment. For in-store transactions, you will need a Retail Point-of-Sale or POS systems who will mainly handle your credit card payments. It will serve as a credit card reader and the electronic processing will function using this all-in-one technology. In addition, you will also need a retail merchant service provider, you will need to simply create an account and all of your credit card transactions will happen here. Basically, after inserting, tapping or swiping a credit card, your merchant service provider will send the payment information to the customer’s financial institution. Within seconds, you will receive either an approval code or a declined message. Once approved, you will simply complete the transaction usingPOS and generate a receipt. Then, your chosen merchant provider will directly deposit the money into your bank account and will usually take 1-2 business days. If you have an e-commerce site or online store, you will need to sign up for an E-commerce platform such as Shopify or Amazon. The sale process will happen inside the platform. You can also create your own website for E-commerce purposes and get a secure gateway to process your customer’s online payment. There are unique rates and fees associated with each of these online solutions.
Consider other payment gateways. For online purchases, there are other payment options that you can choose. Payment gateways such as Paypal, Stripes, and Square are the leading solutions for e-commerce. During the online payment process, customers will enter their credit card information on the check-out page, the secure gateway will now encrypt the information and sent to their financial institution. Merchant will receive an approval or declined message. Once approved, your platform will automatically complete the sale and provide transaction number. This option is the most convenient, the most cost-effective and highly recommended for online entrepreneurs.