Finance

Accepting Credit Card Payments In 2021: An Essential Guide For Businesses

As a small business, the prospect of accepting credit cards can be a complex and confusing process. However, the ability to accept these payments can significantly increase your customer satisfaction and revenue. Accepting credit card payments is typically a win-win for businesses and consumers alike. Once an enterprise begins taking credit card payments, they rarely look back as the benefits far outweigh the costs. Our essential guide will help you understand how credit cards can benefit your business and how the process works before you begin implementing it into your company.

Why You Should Accept Credit Card Payments

Accepting credit card payments is necessary in order for businesses to scale up. Although, in some cases, companies may be worried the cost of accepting credit cards may be too much, providing your customers with this payment option will ultimately increase your revenue and sales.

Customer Preference

Most customers prefer to use credit cards for their purchases as they find them more convenient and secure than when using cash. Many people choose not to carry cash as they feel safer without it. If they discover your business doesn’t accept cards, they are likely to forego making a purchase at all as most consumers don’t want to search for a nearby ATM before they can purchase any goods.

Aside from convenience and security, another reason customers prefer credit card payments is because of the benefits that card providers offer customers when they use the cards. Many credit card companies offer air miles, cashback, or other reward schemes in exchange for the customer using their cards for purchases. When a company accepts credit card payments, they increase their customer’s satisfaction as they are providing an opportunity for them to reap the benefits of their credit cards.

Larger Purchases

When you accept credit cards, you increase the likelihood that your customers will make larger purchases or, in some cases, impulse buys since they are not limited to the cash in their wallets.

Increased Credibility

Many customers view companies that accept credit card payments are more trustworthy. Accepting card payments will increase the footfall to your business as your enterprise will be seen as more credible than if you only accept cash.

Transaction History

As many electronic payment systems track customer payments, the data collected could help you expand your business by developing special offers or reward programs in order to attract more sales. These systems also help you keep track of your inventory and provide you with plenty of notice to order more stock when needed. Not only can a transaction history help you to expand and keep track of inventory for small businesses, but this information is also vital for tracking transactions and can be used to analyze holiday sales as well as other metrics.

Online Sales

By accepting credit cards, your business can extend into the online market. Once your company has an online presence, your revenue will make a significant increase, allowing you to scale up your business further.

Reduce Risk

Credit card transactions are processed faster than regular payments, which puts the funds into your business account much faster. Card payments are typically deposited into the account within 48 hours of the transaction, which improves your overall cash flow. You won’t need to wait for invoices to be paid or worry about bad checks bouncing; when a customer uses a card to make a payment, it is transferred quickly and without risk.

Reduce Costs

When you have fewer transactions involving cash, you will spend less on counting and transporting the cash to the bank. The funds from a credit card transaction are moved electronically to your business account without any fuss.

Fraud Protection

Top concerns for many businesses when considering accepting credit card payments are fraud, identity theft, and data breaches. When you use a reputable processing company, they typically offer fraud protection services that will protect you from these risks.

Affordability

Small businesses often worry that they can’t afford to accept card payments, but the truth is that most companies can no longer afford not to accept these payments. When choosing a merchant account or payment processor, it is vital that you find a company that is suitable for your small business as this will keep the costs of accepting credit card payments low, which will allow you to take advantage of the increase in sales and revenue these payments will bring. The sales and revenue increase businesses experience once they start accepting credit card payments more than offsets the processing fees. For more information on the cheapest way to accept credit card payments, check out NadaPayments’ guide.

How To Accept Credit Card Payments

Before you set up your credit card payments, you will need to determine your business needs, and in order to do this, you will need to consider if you will be offering in-store payments, online payments, or a combination of both. Once you understand your needs, you will have a better perception of what you will require from a payment service provider or a merchant account.

  • In-Store: When it comes to accepting credit card payments in-store, you will need a payment service provider or a merchant account and either a point of sale system or a credit card terminal. The hardware and software for credit card reading can range from small card swipers that work in conjunction with your cell phone to large standalone terminals connected to your point of sale device. Many payment service providers and merchant accounts will include the software and hardware with your account, whereas other may require you to purchase or lease this equipment.
  • Online: When you need to accept payments for credit cards online, you will require an online purchasing system, a payment service provider or merchant account, and a payment gateway. Payment gateways are an electronic system that connects with the credit card company in order to authorize online transactions. When it comes to an online purchasing system, you will need to choose one that works well with your website and existing business practices.

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