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The Pros and Cons of Accepting Credit Card Payment

Melanie James — Tue, 03 May 2011 09:21:58 +0000

If you own a business, perhaps you’re considering the possibility of accepting credit card payments from your customers. Should you take that step forward and implement credit card processing with your business? Or should you just stick to the traditional methods of payment which are cash and check payments?

In this article, let us discuss the pros and cons of credit card merchant processing to help you decide whether or not it’s the right time for you to accept credit card payment.

The Cons of Credit Card Payment
Let’s start with the consequences. What can you expect from credit card merchant processing?

Processing Fees. When customers pay in cash, the seller does not have to worry about extra fees at all. However, accepting credit card payments would mean paying the processing fees.

The specific cost may vary depending on your chosen merchant account provider or credit card processing company. On the other hand, if you’re going to use a third-party credit card processing service like PayPal, the fees may prove to be even more costly for each credit card transaction.

Accounting Issues. Since you will be accepting two different methods of payment, you will need to monitor two types of accounts as well. At first, this can be demanding especially if you’re not familiar with credit card processing but as you learn the ins and outs, you should be able to monitor your accounts more easily.

The Pros of Credit Card Payment
What about the positive aspect of credit card processing? What are the advantages of offering credit card payment to customers? Consider the following points:

Flexibility. By accepting credit card payments, you are offering customers more than one way to purchase. If they like to purchase your product but do not have cash to do so, they can simply charge the bill to their credit card and pay it at a later time.

Safer. For safety reasons, many consumers today prefer to shop with their credit cards rather than bring cash. Meanwhile, the risk of losses is greatly reduced for business establishments or shop owners that hold less cash in their premises.

Convenience. A lot of people who don’t have the time to go out may prefer to purchase online. If you have a business website, customers will have the option to purchase online if you accept credit card payments.

Do you have a tip you want to add to the list? Please feel free to share by leaving a comment.

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About the Author:

Melanie James has spent the last 14 years working with businesses to implement quick, effective and inexpensive changes to their businesses to increase productivity and their bottom line.

Online Credit Card Payment – How to Get Started

Melanie James — Fri, 29 Apr 2011 05:17:06 +0000

Accepting credit card payment from customers who shop online is a great way to enhance a business. It doesn’t matter whether you own a small business or a big business. By giving your customers the chance to shop directly from your website, you can dramatically boost your sales performance. But how do you get started with credit card processing?

In this article, we present the step by step guide on credit card merchant processing:

Apply for a Merchant Account. A merchant account is linked to your business checking account. You can open a merchant account from a bank or a credit card company that offers credit card merchant processing services.

If you want to accept credit card payments online, you must apply for an online merchant account. Take note that it is different from a retail merchant account which involves transactions where a customer pays with his/her credit card and the actual card is swiped into the terminal.

It can take anywhere from a week to a few weeks to set-up an online merchant account so it’s a good idea to give yourself sufficient time to prepare before you begin accepting credit card payments.

Acquire the necessary tools. Online credit card merchant processing uses an online payment gateway system. The payment gateway system is connected to the merchant account provider or credit card processing company. The gateway is where card information are encrypted and transmitted to the credit card processing company and back to the merchant’s end. There are different types of payment gateway systems, depending on the type of credit card you want to accept.

Another essential tool that you must acquire is a shopping cart software. This virtual shopping cart will be used by customers who want to purchase from your website. It is important to make sure that the shopping cart system is easy to use, secured, and compatible with your payment gateway system.

Prepare to accept credit card payments. It’s very important to understand the process of online credit card payments before implementing such a major change. See to it that you understand the steps on how you can protect your business as well as your customers from fraudulent credit card payments and identity theft.

Get to know the processing fees you may incur for each transaction. Since the specific fees vary depending on the credit card processing company, you should take the extra time reading the Agreement to avoid unpleasant surprises later on.

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About the Author:

Melanie James has spent the last 14 years working with businesses to implement quick, effective and inexpensive changes to their businesses to increase productivity and their bottom line.

Advantages of Accepting Credit Card Payments

Melanie James — Fri, 14 Jan 2011 02:40:19 +0000

If you are a business owner, it may be about time for you to incorporate credit card processing in your business. Being able to accept credit card payment from your customers will surely bring many advantages. What are those advantages?

Increase your customer sales dramatically. Offering your customers a quicker and more convenient way to purchase from your store will definitely boost your customer sales.

Many consumers today prefer to use their credit cards for shopping because they can pay even without cash.

Enjoy competitive edge over other merchants. Accepting credit card payments will give your business a competitive edge over other merchants who only accept cash or check payments.

Receive customer orders 24/7. If you have a business website, you can receive orders from online shoppers at any time of the day, all days of the week, and all days of the year.

Offer a safe method of payment. Some consumers may still be hesitant to pay online for fear of being a victim of fraud or ID theft. However, the American Bar Association reports that credit card payment is still considered to be the safest method of payment for both online and regular transactions. This is because credit card companies provide their customers with liability protection on unauthorized charges.

Improve your business cash flow. Another great benefit of accepting credit card payments is it helps improve the cash inflow for your business.

Enhance your company’s image and credibility. A business with a merchant account is seen as a reputable and legitimate company. Prospective customers will be more confident to purchase from your shop and choose you over other merchants.

Keep track of transactions more conveniently. Credit card merchant processing is a much quicker way to keep track of your invoices or sales transactions. IT also minimizes the risk of payment default as long as all customer orders are delivered on time and in good condition.

Accounts Receivables Financing. Having a merchant account gives you the opportunity to acquire cash advance from lending companies that offer Accounts Receivables Financing. This is a business financing option where accounts receivables from credit card transactions can be sold to a lender through merchant cash advance.

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About the Author:

Melanie James has spent the last 14 years working with businesses to implement quick, effective and inexpensive changes to their businesses to increase productivity and their bottom line.

How Your Business Can Accept Credit Card Payments

Melanie James — Mon, 14 Sep 2009 06:41:07 +0000

Accepting credit card payments is definitely a huge advantage for any business. With the popularity of internet shopping, many consumers today prefer the convenience and cost-effectiveness of shopping online.

Thus, if you don’t accept credit card payments, you could be losing a large percentage of potential customers. The question is, how do you accept credit card payments?

Opening a Merchant Account

The first step to be able to accept credit cards as payment is to apply for a merchant account.

Banks and merchant account companies offer credit card payment systems for both small and large businesses. However, before you sign up for their service, do your research well and check the exact terms and conditions of your chosen merchant account provider.

When comparing merchant account service providers don’t forget to check the pricing. How much would it cost you per card transaction? How much would be the set-up charge? What kind of support does the company provide to their customers?

What about the reputation and track record of the company? What do present clients have to say about their service? These are important questions to consider when choosing a merchant account company.

Does My Business Qualify?

If you’re running a home based business or a small business, what are the requirements to get approved for a merchant account status?

Of course, your business’s financial standing would be reviewed. Banks or merchant account companies would be interested to learn exactly how much you earn from your sales each month. If your business has a stable history of sales and income, you should have no problem getting approved for a merchant account.

Another factor that would affect your lender’s decision would be the status of your business credit history. Have you already established a business credit? Usually, a business needs to be at least 2 years in operations to get approved for a merchant account. In 2 years, you should have already established a solid business credit history as well.

Needless to say, if you have a problem with your business credit, it would be difficult to get an approval. To be sure, check your business credit report at least 6 months in advance and do the necessary steps to improve your rating before applying for a merchant account.

On the other hand, having a good to excellent business credit history would surely win you a quick approval. If you can prove that your business has been running smoothly for a considerable period of time, and that you have a good business partnership with your suppliers, achieving a merchant status wouldn’t be difficult at all.

Accepting Credit Card Payments

Once approved, you’re now ready to accept credit card payments. See to it that you clearly understand how the processing of credit card payments work. Your merchant account provider should give you all the assistance and support you need to make sure that unnecessary problems would be avoided.

As the owner, you should also be aware on how you can protect your business from the risk of identity theft and credit card fraud. Before accepting credit card payments, you should be completely prepared in handling your incoming credit card transactions.

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About the Author:

Melanie James has spent the last 14 years working with businesses to implement quick, effective and inexpensive changes to their businesses to increase productivity and their bottom line.

How To Avoid Chargebacks

Melanie James — Thu, 28 May 2009 14:04:27 +0000

Do you own a business? If yes, then perhaps one area of your business that you’re most concerned about is your payment processing system. Today, every small businesses can accept credit card payments from customers. However, with cases of credit card fraud ever increasing, both consumers and business owners are warned to take the necessary precautions to avoid possible problems.

What is a chargeback and how can you avoid them?

One of the most common problems about accepting credit card payments is getting charge backs. But what are charge backs?

When you accept credit card payment from a customer, there’s a possibility that the customer can change minds, or isn’t even the real owner of the credit card.

Perhaps the credit card has been stolen and is being used without the real card owner’s consent.

By the time the credit card owner receives his/her billing statement, he or she may dispute these unauthorized charges. Under the Fair Credit Reporting Act, a consumer has the right to dispute unauthorized charges in the account. In this case, when the consumer calls up the bank and advise them about these unauthorized charges, the credit card issuer may move for a reversal of that particular credit card transaction.

Obviously, credit card charge backs can affect a business’s sales and marketing performance. If you’re not careful, a huge amount of chargeback can result to a major loss in your profits. What you thought was a genuine sale for your business later on may prove to be a fraud.

To avoid being a victim of credit card fraud, it is the merchant’s responsibility to accept credit card payments with extreme caution. Here are some steps you should take before closing that credit card purchase.

• Swipe the card or imprint it on the transaction receipt. In case of a dispute, having the card swiped proves that the customer presented the credit card when the purchase was made.

• Closely examine the cardholder’s signature. Sometimes, it is easy to overlook this crucial step especially when there are a lot of customers in line, waiting for their turn in the cashier. But checking if the customer’s signature matches the signature at the back of the credit card can alert you of a credit card theft. Instead of presuming that the credit card holder is the real owner, keep in mind that there is always a possibility that the credit card being used is stolen.

• Ask for proof of identification. Some shops do not ask for additional IDs unless it’s a huge purchase amount. But even if it’s just a small amount of purchase, every merchant should make it a practice to ask for at least one ID from their client.

• Check the credit card’s expiration date. Don’t forget to check the expiration date on the credit card. There are cases when credit card thieves use old or expired credit cards and get away with it.

• Call the credit card issuer. If you’re in doubt, take a moment to call the credit card issuer to confirm the details of the cardholder.

About the Author:

Melanie James has spent the last 14 years working with businesses to implement quick, effective and inexpensive changes to their businesses to increase productivity and their bottom line.

Requirements for Processing Credit Cards on Small Business Web Sites

Melanie James — Thu, 21 May 2009 23:48:47 +0000

A business that accepts credit card payments online definitely has the edge over its competitors. As more and more consumers today prefer to shop from the internet, you just can’t afford not to have an online order option and online payment system on your website. Yes, even if it’s just a small business, having a credit card payment system will make a big difference in your marketing performance.

The first step you need to do is apply for a merchant account. You can contact your bank and apply for a merchant account so you can get started with your e-commerce site.

But what does it take to be able to accept online credit card payments? And what are the requirements needed in a credit card processing system?

Preparing Your Website

Secured Web Site. The primary factor you need to ensure is the security of your customers. See to it that your website is encrypted with at least 128-but SSL (Secure Socket Layer) certificate.
PGP Encryption. PGP encryption is used for protecting e-mails from getting hacked. If a customer chooses to place his order via e-mail, a PGP encryption will ensure that the contents of the e-mail will have some protection.

Firewall. Since you will be handling credit card details and personal information from your customers, it is crucial to do all the necessary steps to protect their privacy. Another way to do so is to set-up a firewall on your website.

Shopping Cart The right shopping cart application. Find a shopping cart that is not only safe and secured but one that is dependable.

There are several e-commerce software providers in the market so you’ll want to take your time in researching and looking for the best one. Make sure that it is able to accept different payment gateways.

Remember that you prospective customers will not be using only one type of credit card. A shopping cart application that accepts Visa and MasterCard is great but if you can find one that accepts a wider range of gateways, then the better it is.

Also, you’ll want to get a shopping cart that is easy to use and efficient. Test if your shopping cart really lives up to its promises. Usually, a customer who intends to buy can lose interest if he can’t figure out how to use your shopping cart. Find a shopping cart provider that will give you a 24/7 customer support in case you need assistance.

Privacy Protection Statement. Assure your online customers that their privacy is respected and duly protected. A Privacy Protect statement should be posted on your website. More importantly, stay true to your promises. Don’t sell the information you collect from your customers to marketing companies or brokers.

Register with legal organizations. Being registered with trusted organizations in the business industry like the Better Business Bureau will give your business more credibility. Posting official logos from prominent organizations will give your customers more confidence in buying from your website.

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About the Author:

Melanie James has spent the last 14 years working with businesses to implement quick, effective and inexpensive changes to their businesses to increase productivity and their bottom line.

Accepting Credit Cards: A Strategy to Boost Your Business

Melanie James — Fri, 24 Apr 2009 00:08:38 +0000

Online marketing is the modern way to do business. If your business already has a website, then you have already noticed an increase in your sales and customer potential.

Aside from creating a professional business website and making sure that its user friendly, there is another thing that you need to consider. What, you may ask?

Accept credit cards. Accepting credit cards from your customers will not only boost your sales, it will also give your business a better reputation.

Credit Cards Are a Must!

As we all know, almost everyone who is old enough to qualify for a credit card have one. And it is also a well-known fact that everyone who owns a credit card obviously use it in making purchases whether at regular stores or at online retail shops. Imagine how many potential sales you will be losing just because your customers are not able to purchase from you using their credit cards.

When a prospective buyer visits your business website and sees a product that he wants, your buyer might get disappointed to find out that your business only accepts cash purchases. The next time around, this same buyer may not even bother to visit your website again because he knows that you’re not accepting credit card transactions.

Advantages of Credit Card Payment

Remember, people always prefer what is more convenient for them. With a credit card, a person can instantly purchase a product he likes in just a few, simple steps without even going out of his house or office. This enormous convenience is one of the major reasons why most people prefer online shopping.

Another reason, is of course, most often than not, they don’t have the cash to make the purchase at that very moment.

A credit card gives your customers the opportunity to buy the product they want in advance, and pay them at a later time when they have the money.

Protect Your Customers

However, accepting credit cards require that your business can assure the security and safety of your customer’s personal information. With the prevalence of identity theft and credit card fraud, customers are also wary about making online purchases. Thus, it is very important that your website is embedded with SSL or Secure Socket Layers of at least 128 bit.

Customers will know that you are using SSL encryption when they see a padlock icon at the bottom right side of their browser. This way, your customers will feel at ease at placing orders and filling up their credit card information at your website.

Another credit card marketing strategy that your business needs is having a customer support system. When you accept credit card payments, you should be able to provide quick response to your customers regarding the status of their order, the status of their payment as well as the shipping details about their orders.

Be sure that you can provide support to your customer’s queries about matters concerning their purchase. Following these credit card strategies will surely increase your customer base and boost your sales in no time.

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About the Author:

Melanie James has spent the last 14 years working with businesses to implement quick, effective and inexpensive changes to their businesses to increase productivity and their bottom line.