Small business owners who don’t accept credit cards have many reasons for the practice. However, continuing to operate a cash-only business, which Entrepreneur magazine calls “the worst mistake for small businesses to continue in 2014,” can cost a business more money than doing so would save it. Increasingly, people simply do not carry cash when they’re out and about. A study MasterCard published in September found U.S. consumers in 2011 completed around 80 percent of their purchases without cash, and determined the country was at that time on its way to becoming nearly cashless. Consumers want to have the option to pay with a method that is readily available to them, and in most cases that’s a credit card.
Many small business owners are reluctant to accept credit cards due to the associated fees. These fees are inevitable when accepting credit cards, as they are charged even by alternative point-of-sale services. However, small business owners should consider whether the fees associated with accepting cards are really enough to discourage them from pursuing the revenue that comes with a growing customer base. Equipping a business to accept credit cards is a good way to draw more traffic. Additionally, without the necessary planning involved in taking out money to shop at a particular small business, consumers may well make more purchases on impulse.
How should you process credit cards?
Merchant credit card processing services vary widely between providers. There are many models and appearances available for point-of-sale solutions, so this is not usually a major factor in a small business owner’s decision. Business owners should consider the rates offered by different providers, as well as their own back-office needs. For example, some point-of-sale systems that allow merchants to accept credit cards will provide many separate statements, one from each credit card company that has processed payments to the business. This can be difficult from a recordkeeping standpoint. There are other functions a point-of-sale system can perform, according to Entrepreneur. Some allow small business owners to track their inventories and will even give an alert when a product needs to be restocked.
Processing credit cards does cost money, but it needn’t be a large expense. Working with a vendor who can offer low fees, a free setup and other necessary features can reduce the expense involved in accepting credit cards, and maximize the benefits instead. Such solutions are available from National Funding.