Are you the owner of a small business that has been cash-only so far?
It’s easy to launch a business and keep things simple when you only take cash and checks. Many businesses like the “mom and pop” feel that comes with low-tech transactions. But if you want your business to grow, the ability to accept credit card payments is key.
Here’s the good news. Adding credit cards as a payment option for your customers is simpler than you may think.
The importance of accepting credit card payments
You’ve likely already noticed customers complaining about not being able to use credit cards when shopping with you. To be candid, you’ve probably also lost some opportunities for sales. And you’re not alone.
Not accepting credit card payments costs US business owners billions of dollars every year.
As technology becomes increasingly prevalent, customers are looking for convenient alternatives to cash. This means, for example, that students often depend on debit cards. Families short on cash like the option of using a credit card to put off paying in full for purchases. People of all ages are shopping online. And mobile payments via apps are also growing in popularity.
But that’s not all. Customers also tend to spend more when using credit cards instead of cash. That alone can translate to significant revenue boosts for a small business.
If you’re a business owner who has resisted accepting credit cards because of the fees involved, know that the increase in spending with credit cards can more than offset the small fees involved. One helpful tip is to work with a payment processor with the lowest fees.
Being able to accept credit card payments also means you can attract new customers online. Setting up merchant websites used to be a complicated process. Now you can build a basic website in a day and reach shoppers around the world.
This is particularly advantageous for retailers.
Additional reasons to accept credit card payments include:
- Reducing the risk of counterfeit payments
- Eliminating the need to carry loads of cash or worry about change
- Lowering the possibility of employee theft
- Improving accuracy in reconciling accounting
- Encouraging impulse buys, especially from foot traffic
- Conducting business in areas with few ATMs
- Reassuring customers they have refund and chargeback protection
How to accept credit cards at your business
If you have felt overwhelmed by the thought of adding credit cards to your business payment options, rest assured. It’s not as complicated as you may think.
Let’s break the task down into 5 easy steps.
1. Assess your business needs
Before anything else, take a good, hard look at your business needs. Your needs are completely unique to your business.
Do you need to develop a website for online sales to augment your brick-and-mortar business? Are you a mobile business? What are your customer demographics? What’s your average transaction size? How much do you anticipate you’ll process per month?
And don’t stop there.
Think about how accepting credit cards could change your business in the future. This is the ideal time to evaluate your goals and where you see your business will be in a year, five years, and even 10 years.
2. Select a payment processor
If you accept payments from one of the major credit cards, such as Mastercard, Visa, or Discover, you’ll need a merchant service provider (MSP).
Merchant service providers don’t keep banker’s hours. If you have a problem after hours or on the weekends, there is someone there to help. Also, merchant service providers typically offer packages to help you begin taking credit cards, including high-quality terminals and hardware, as well as cloud-based point-of-sale (POS) systems and customizable programs.
Your payment processor acts as an intermediary between the customer, your business, and your bank. They verify the customer’s credit card, ensuring the payment is approved, so the transaction can be completed. In no time, money from the transaction is transferred to your designated account.
3. Discuss pricing structure
There will be fees involved in accepting credit cards, but as mentioned above, you can easily make up the difference with increased sales. Be sure you understand the fee structure fully before signing with a payment processor. A good processor will be upfront with you about fees.
There are three basic types of pricing that are popular today:
- Tiered pricing
- Interchange Plus pricing
- Flat-rate pricing
Ask about each of these structures and why the payment processor may recommend one over the other for your business.
4. Consider payment logistics
Accepting credit card payments can be completely seamless when you have the right hardware. Each business is different in terms of what would make payments most efficient. When you imagine your customers paying by credit card, what picture comes to mind?
For some businesses, being able to take orders, deposits, or reservations online is key. For others, it’s taking orders on-the-go or accepting custom gift cards. Do you need touchscreen devices that employees can use around your shop or a particular type of receipt printing?
A top-notch payment processor will provide you with the hardware you need to keep both your employees and your customers happy. (Some payment processors even do this at no fee.)
Making transactions quick, safe, and accurate will encourage customers to continue to use credit cards and will give your business a professional edge.
5. Ask about additional perks
Taking credit cards opens up possibilities that you might not have imagined. Do you need money to grow your business or to cover urgent expenses? You may be eligible for a merchant cash advance (MCA).
An MCA is a cash advance against a small percentage of your future credit card sales. There are no limitations on how you can use the funds, and this type of advance is much easier to obtain for new and small businesses than a conventional bank loan.
Ways you can get started now…
If making the switch to credit card payments sounds like the right decision for your business, there are some things you can do today to make the change easier.
- When selecting a payment processor, be sure to ask about how they will keep your clients’ data safe and protect you and your customers from preventable cybersecurity breaches.
- Not all payment processors deal with the same client base. Look for a payment processor that understands the way business is conducted in your industry. There’s a big difference between selling auto parts and running a cafe.
- Accepting credit cards is wonderful, but you need to let your customers know about it. Give some thought to launching a publicity campaign once your new credit card policy is official so consumers recognize how you’re catering to their convenience.