You may be skeptical about upgrading to accept debit and credit cards, but have you considered what itâ€™s costing you by not enabling credit card processing?
Whether youâ€™re an artisan that sells fresh-baked goods, youâ€™re a crafter whose business is starting to boom, or youâ€™re any number of successful small businesses in the US, being able to process credit cards is one of the most important tools you can take advantage of to see your business continue to grow.
If you havenâ€™t yet started taking credit or debit, youâ€™re not alone. Surprisingly, many small businesses have yet to jump on board to accept credit and debit purchases. In fact, a software maker that studies small business trends found that 55% of small businesses in the US did not accept credit cards. The survey found that this crucial variable cost each business an estimated $7,000 in annual sales. That represents a loss of $100 billion  in this country that was collectively lost to small businesses across the nationâ€”simply by not accepting plastic.
The great news about choosing to upgrade to accept credit, debit, and other forms of payment now is that you have more choices to compare costs and services.
As a business owner, you know the convenience of accepting credit cards is probably going to have an initial cost, but keep in mind that this upgrade also means potential for a big boost in profit, too. With a little bit of research upfront, you can be sure youâ€™re getting the valuable services you want and the support services you need that will make it all worth it.
Weâ€™ve compiled the following must-have tips with the needs of your small business in mind. Read on to find out how to make the smartest decisions as you navigate this new technology.
Tip #1 – Choose to Swipe â€“ Why Manually-Entered Transactions Cost More
Some business owners ask, â€œIs a credit card processing system really necessaryâ€”what about manually entering the card in my system?â€
When you manually enter a credit card in for payment, simple user error increases, along with an increased risk of fraud, so this additional risk also increases the cost per transaction for you as a business owner .
Swiping is safer and will save you money because it lowers your risk of fraud. Swiping ensures that the built-in security feature of the card is utilizedâ€”namely, the magnetic strip on the card. What you can do as a business owner is make sure that everyone on your team avoids manually entering digits when possible.
Always be careful when accepting credit without the physical card present because the risk of fraud is always a concern. If fraud is suspected, you always want to make sure that you ask for a driverâ€™s license or other form of photo identification, and ensure that you double check that the name on the card matches the name on the ID.
The takeaway here is that a little bit of training for your staff and due diligence on your part can go a long way in preventing credit card fraud.
Tip #2 – Ask the Right Questions about Credit Card Processing
According to the US Small Business Administration, your merchant account company can charge upwards of 5% on everything your business earns from both credit and debit transactions . The costs sited here include everything from interchange costs, gateway fees, processing costs, statement fees, and charges from Visa, MasterCard, and American Express.
The Small Business Administration goes on to explain that there are special rates that can be found for small businesses and of course, you can ask the credit card processing company what money-saving options are available to you. For instance, some companies may lower rates on specific cards you frequently accept. The takeaway here is that it pays to find a provider that has low fees to offer while strengthening the creditworthiness of your company.
So how do you find the best credit card processing company for your business? First, you have to learn to ask the right questions. Here are some ideas to mull over when youâ€™re considering which service to choose. By finding out the answers before you choose your company, you can be sure you have the most critically important information to make the smartest choice possible.
There are several types of credit card processing fees that you can request clarification and more information on when youâ€™re making the switch:
Early Termination Fee â€“ Some processors could charge you fees to cancel your contract. Find out what your agreement locks you into and what fees are applicable if you choose to discontinue service.
Minimum Monthly Fee â€“ If you donâ€™t reach the minimum amount of transactions every month, you may be charged the difference to make up for it. For instance, if the minimum amount was $30 and you sold $25, you would be charged $5 to make up for the difference in reaching your minimum transaction.
Interchange Fees â€“ These fees vary depending on where the charge is made and for how large of a purchase. In-store purchases bring less risk because the card is present, so interchange fees would be less in-store than a charge by phone or online.
Fees for Monthly Statements â€“ You may be charged to cover any administration, printing, and mailing costs associated with creating your statement. On average, you can expect around a $10 fee.
Gateway Fees (Application and Setup) â€“ Depending on the company, this one really needs to be figured in with the overall value of services. Itâ€™s a fee that does vary widely, so take into consideration the overall benefits and costs with this one.
With credit card processing services, you can expect a variety of charges, so it definitely is worth the time to make sure you understand all the cost involved. By asking what fees are involved, you should be able to get a clear explanation of what to expect.
Another question that youâ€™ll want to ask before signing on the dotted line is about their customer service and how flexible the company is when technology evolves. Check out this final tip and find out how to make sure you get support when you need it.
Tip #3 – Compare Processing Companies to Find Services that Matter Most
So youâ€™ve decided to get on board and offer your customers the convenience and security of accepting debit and credit cards. What company should you choose? Here are a few questions to ask when youâ€™re making your decision.
Setting up your new credit card processing technology should be a fairly simple process, but find out how long your new processing company takes during the initial setup period. Finding out what support they offer during setup can save you frustration down the road.
Itâ€™s also a good idea to ask about their customer service and what to expect when you need help later after things have been up and running. What if you need assistance after business hours? You should feel confident that you can get ahold of someone if you have questions about billing, fees, or if any technical problems arise with your credit card machine. Good customer satisfaction should be a priority for any good credit card processing company, and you should be able to get straightforward answers with what to expect in this regard.
Are all major credit cards accepted?
If youâ€™re going to upgrade your system, itâ€™s important to know what types of credit cards and debit cards are accepted before you make that decision. The worst thing would be to turn customers who want to purchase from you awayâ€”thatâ€™s the whole point of upgrading, right?
You may decide that you want a system that can accept gift cards and prepaid cardsâ€”that way youâ€™ll open up even more opportunities for sales. If your business has a pantry or grocery, you would also probably want to make sure you can take EBT cards as well.
Does your credit card processing company offer new payment processing technologies?
If youâ€™re a business that draws in the tech-savvy crowd, you may want to find out if your processing company offers near-field communication technology (NFC). This technology allows you to be all set up to take payment from Google Wallet and Apple Pay.
More and more people are using these contact-less forms of paymentâ€”Apple Pay being the leader that represents the majority of transactions. Itâ€™s a good idea to ask your credit card processing company what they offer in new payment technologies so that you can be confident you have room to grow when your customer base grows and changes.
Whether youâ€™re just starting out with your small business, or your business has expanded and has got you thinking about accepting credit and debit cards, making the switch now has never been a better time. As an informed business owner, you now have the power to ask the right questions and find the company that values your business and supports your growth in all the best ways.
 “Businesses Miss Out on Sales,” Investors Business Daily, 23 5 2012.
 Intuit QuickBooks, “Reducing Credit Card Processing Costs,” 2015. [Online]. Available: http://quickbooks.intuit.com/reduce-credit-card-processing-costs/. [Accessed 25 November 2015].