Accepting Credit Cards – Is It Advantageous For Your Business?
Business owners can expect a significant increase in earnings once they start accepting credit card payments. Credit cards are used by two types of customers – those who purchase items on credit when they do not have adequate cash on them, and those that habitually use credit or debit cards for all their expenses so they make a single consolidated payment on receiving the statement every month. By opening your doors to credit payments, you reach out to new customers, reduce overheads, maximize cash flow, and enjoy a number of other benefits.
Advantages of accepting credit card payments
All businesses can benefit from it. With the fall in processing rates and easy set up of merchant accounts, businesses of all sizes can use the services of a credit card processing company and get started easily.
Immediate credit card payments benefit online businesses
E-commerce businesses, that earlier relied on mail orders and check payments, can take advantage of the quickness of credit or debit card payments. Payments can be accepted on the online business or e-commerce website and orders can be shipped immediately without waiting for checks to arrive and get cleared by the bank.
Offering customers new payment modes
Businesses have to set up a merchant account to allow credit or debit card processing. A merchant account allows the business to accept credit cards, debit cards, ATM cards, checks, and cash – offering customers a whole range of payment modes. You offer customers the convenience of flexibility while extending your business methods of invoicing and collecting payments.
Reduce bad debts and maximize cash flow
Assume you have a costly product or service that a customer wants but cannot pay for immediately. To help her out and make the sale, you extend credit expecting her to make all her payments on time. That doesn’t work as expected, and reminders get you nowhere. You have a bad debt on your hands. If you have faced similar problems, you know how difficult and time consuming it is to collect a past-due receivable.
Instead of extending credit, you can accept credit or debit card payments from customers, thereby minimizing the risk of bad debts. You receive the full payment from the customer. The service provider will recover the amount from the customer through monthly payments.
Credit card payments bring down the overheads of conventional billing. The transaction fee charged by a card processing service for a credit or debit card payment of $80 will fall cheaper than the cost of printing and mailing an invoice to the customer. The difference becomes even more significant if you add the overhead of sending reminders.
Payment processing fees are well within reach of all businesses, large or small. It is no longer necessary to have a high monthly volume of transactions to afford the cost of processing cards. Irrespective of whether you work out of an office, home or manage an online business, you can easily set up a merchant account inexpensively. In fact, payment processing vendors also offer comprehensive solutions that cover merchant account set up, reporting, fraud protection, security, and other services so that you may collect payments efficiently.