As a business, you must be able to accept credit card payments. Otherwise, you’ll miss out on sales and happy customers.
Benefits of accepting credit card payments
Whether you’re starting a new business, or have been in business for a while, make sure you’re set-up to take credit card payments.
Related: Why your business needs an EIN
Cash is no longer the norm for transactions. Now, consumers are using credit cards, and digital wallets to pay.
If you aren’t taking cards, the following are benefits of doing so:
- More sales: You’ll find that there are more people using cards than cash. People want convenience when they’re shopping. If you’re a cash-only business, you’ll find people leaving your store because of it.
- Happier customers: If a customer can’t buy something because they don’t carry cash, it can lead to an unhappy customer. The ability to accept card payments will ensure a smooth shopping experience.
- Improves cash flow: Since the payments are processed electronically, you can receive the deposits in one day, whereas, checks or invoices can take multiple days or weeks.
- Sell anytime online: If you sell online, you can accept payments at any time of the day because your website is always open.
- Security for your store: By accepting card payments, you won’t have large amounts of cash at your store, which minimizes security risks.
Staying up-to-date with technology and consumer habits will help you develop your business. That’s why the ability to accept card payments is important.
Costs and fees
As with many services, there are costs and fees. Therefore, you need to work in the fees into your cost of doing business.
Depending on the company you decide to work with, there can be different costs, and they are tax-deductible.
Generally, you’ll pay a percentage per transaction. It can be a flat-rate percentage or tiered. The following are common costs that you’ll encounter:
- Fee for each transaction.
- Percentage of the sale.
- Set-up fees.
- Monthly, quarterly, or annual fees.
- Equipment to process payments.
Since there are costs and fees, you may need to raise your prices or lower your costs to accommodate.
How to accept credit card payments
To accept credit card payments, you’ll need to choose a payment processing company.
This is the company that handles the transaction by relaying the payment information from the customer to the merchant’s bank account.
The following are several of the best payment processors:
- Flagship Merchant Services
- Payline Data
When you’re deciding between the different companies, the cost is one of the most important factors.
However, you must also consider the benefits of choosing one over the other, and the customer service that’s available.
Paying slightly more for a company that offers excellent customer service is worth it because you can trust that they’ll be there for you when you encounter issues with payment processing.
Aside from the payment processing company, you’ll also need an employer identification number (EIN) from the IRS and a business bank account.
The ability to process credit card payments is important for your business because the majority of shoppers will pay with a card instead of cash. There are plenty of low-cost options that are easy to set-up, which makes it possible for you to begin accepting card payments.
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Featured image courtesy of Unsplash.
About David Em
David Em is the founder of More Money More Choices, which he launched to help you take control of your finances and build your dream life. Before More Money More Choices, David worked in leadership positions in the finance industry.