Like any other business, there are advantages and disadvantages to accepting credit cards. We have included both so you can make an informed decision on if your business should sign up for merchant services. Regardless of the cost you incur, you will see that the benefits outweigh the negatives.
The various pros merchants services offer
1. Increased sales: Yes, this is right, as credit card orders are these days are larger in number than check & cash orders.
2. Faster checkout: It speeds up the checkout line because accepting credit card payment is instant and easy.
3. Cheaper than cash: It is cheaper to accept cards due to the huge order amounts.
4. Security: Dealing with cash needs more security, as the risk involved is high. Dealing with heavy amount can lead to troubles and there is also the possibility of employees giving out the wrong change amount.
5. More choices: The more payment options you offer to the customers, the more you decrease the probability of losing the sale.
The limited cons
1. Cost: Accepting credit cards involves cost similar to every other cost the business incurs. A good approach is taking it as a cost of doing business.
2. Fraud: Degree of internet fraud or risk is possible to some extent. However, such possibilities are extremely rare.
3. Charge backs: It is important to abide by the rules of credit card company’s rule. In this way, consumers are more safe when paying with card and win against the merchants while disputing a charge.
Which businesses are classified as high risk?
When the credit card industry realizes that a particular business is high risk, they conclude that the business model poses higher level of risk as compared to the traditional business. It is important to ensure that the payment processing account is well established and doing business will bring profits to the business as well as the merchant service providing company.
Here, the processing company has to manage the risk and reward, the merchant needs to be fully equipped to do business without going through over inflated charges. As understood, with any service, few companies charge unfair fees and provide incompatible services; hence, it is important to go for the best business company. High risk is involved in companies that are:
1. Involved in morally ambiguous industries
2. Process card-not present transactions
3. Sell products and services to international countries
4. Use risky sales methods
5. Transacts high average dollar amount
Keep this fruitful discussion in mind and plan carefully is your business worth these services or not.