Merchants dislike of Credit Card Processing
If you talk to a merchant and mention credit card processing, you will likely to hear something negative. It’s one of the most loathed services with a questionable reputation that puts many merchants in a bad mood. However, as much as merchants dislike it, credit card processing is a vital service for businesses of all sizes. Here we will touch upon a few of the biggest merchant complaints and try to show the benefits of utilizing credit card processing services.
Why merchants should not avoid credit card processing
In the modern world, it is nearly impossible to not accept credit cards. Everyone from small mom and pop shops to big companies and online stores accept credit cards. In today’s day and age, credit and debit cards are the most common way to pay for goods and services. Many banks have even entered the arena and offer several different debit and credit cards to their customers and give them generous benefits for using those cards. This growth of payment card usage has made it unusual for merchants to avoid credit cards. So this begs the questions, why do so many merchants prefer to not use any type of credit cards processing services?
The short answer is because of the fees, the payment time frame and the pricing complexity of the services. Merchants #1 complaint stems from the costs for accepting a payment by credit card or debit card. Fees can vary from less than 1% to as much as 4%, making merchants wary of accepting these forms of payments. Another factor that merchants generally do not like deals with the settlement times. Once a customer's payment has been approved, the settlement of funds to the business is not immediate. Settlements can take a day or 2 before funds to be realized in their bank accounts. In addition to the costs involved, many merchants don’t want the added hassle of the confusing billing structure for the services. Deciphering payment processing statements is like reading tax codes, leaving merchants to wonder if their merchant services company is overcharging them. These reasons are why many merchants do not want to accept credit cards.
Credit card processing can be different
While it is tempting to dwell on the small amount of money you will spend on the services, you will actually have more to lose by not accepting them. When credit card processing is not available, merchants lose potential clients by making it difficult (or even impossible) for them to pay for goods or services. This means that avoiding credit card processing services can actually hurt your business. The truth is, people, don’t carry a lot of cash anymore. BankRate published research about how much cash Americans carry around every day, and here is what they found:
- Over 60% of interviewed customers have less than $50 in their pockets.
- 10% of surveyed people don’t have cash at all.
- Only 6% carry more than $200.
Moreover, women carry less cash than men. Over 75% of surveyed women carry less than $50 every day, compared to 61% of men. We are evolving into a cashless society where people do not carry large amounts of cash. Merchants many times see credit cards as an unnecessary expense to your business in the beginning. For customers, shopping at a merchant without credit card processing is usually a hassle. Merchants need to determine if the benefits outweigh the disadvantages. Accepting credit cards will only increase your total sales and help propel your business to success. As a merchant, make sure you choose a reliable payment processing company. Partnering with a good payment processing will ensure that fees will be minimal and the benefits will greatly outweigh any negatives that a business could possibly encounter.