Pros & Cons of the common types of credit card processing
The Credit Card Revolution
When the very first credit card was established during the 1950s by The Diner's Club, it changed the way the world would do business. Credit cards continue to permeate nearly every industry as we move towards a cashless world. The consumers now have the ability to turn off their credit cards from their smartphones, effectively preventing theft of their money in a quick and efficient way if their cards ever stolen. Many people even leave their wallets at home, opting to slide their credit card and identification into their smartphone case. Despite this widespread use, what are the pros and cons of a business adopting credit card processing? Should your business adopt it? Every business is different, but it is important to understand all of the costs and benefits of adopting your own new payment preferences.
The Benefits of Accepting Credit Card
The most obvious benefit is that nearly every person in the country has at least one credit card. They have become commonplace in shopping centers and malls. In recent years, businesses have begun using small devices that plug into smartphones for even easier payments. This has allowed small pop-up shops to process hundred more orders than they could when they were only accepting cash. Credit card processing is easier than ever to start, especially with new breakthroughs such as the Square device for smartphones and the rise in mobile banking. By accepting credit cards, you are allowing customers to pay with their most convenient payment method and you gain sales from those who don't typically carry large amounts of cash.
The Credit Card Drawback
The most obvious drawback towards accepting credit cards is the associated feed charged by each company. Most credit card companies charge anywhere from 3-7% of each sale made with their credit card. Some companies even charge a flat rate to even be able to set up their system.
Should Your Business Begin Processing Credit Cards?
Whether or not your business should begin process credit cards is largely determined by your size and clientele. Large businesses must accept credit cards as they are so commonplace and easy for the customer. However, if you are a smaller business and have a small but loyal customer base, it may work against you to start taking on fees if you aren't getting additional customers. The additional fees can add up if there aren't new faces coming through the door.
The Big Takeaway
Credit cards have survived the test of time and are here to stay. As more and more people join mobile banking, they are beginning to discover the next breakthrough in payment, mobile payments. The rise of services like Apple Pay are the next hurdle on the horizon for businesses to adopt in order to continue to make payments easier for the customer. The easier it is for them to buy something, the more likely they will be to buy it.