There are a few businesses out there that only accept cash, but the numbers are declining. Consumers prefer options. And businesses that accept credit card payments do better. One study found that cash-only businesses lose over 11.8 million customers by not accepting credit cards.
Fortunately, it’s easier than ever for businesses to adapt to these new systems. Here’s what you need to know about accepting credit card payments in 2022.
Let's start with the benefits of accepting debit and credit card payments.
Nearly twelve million Americans say they never carry cash and prefer to use debit or credit cards as their default payment method. For some, it's too much of a hassle to get cash. Others, feel it's safer to rely on cards rather than having cash in their wallets. Regardless, they won't be shopping at your store if you don't accept credit cards.
Accepting credit cards can boost your revenue even without making any other changes. Shoppers using cards generally spend more than those paying with cash.
Making your company more adaptable will help you avoid becoming the next Sears or Blockbuster. Accepting credit cards allows you to quickly diversify with options such as adding an eCommerce component to your store or online ordering. Adapting sooner, rather than later, is the best you can do to set your company up for long-term success.
Accepting credit card payments starts with looking at the merchant processing services available in your industry. Whether you sell online, in-store, or on wireless/mobile devices, there’s a solution that fits your needs and protects your business.
Depending on the nature of your business, it might make sense for you to accept specific payment types. For example, if your company operates primarily on mobile devices, then it’s best to accept payments like Apple Pay and similar systems.
Credit card processing systems use models such as flat-rate, interchange, or tiered pricing.
Flat rate: The benefits of flat-rate are simple; predictability. With flat rate, you won’t have to worry about any surprises, and you’ll pay the same amount for each transaction. Conversely, the downside is that the rate remains the same for small purchases. (Some merchants by requiring a minimum purchase price for credit card payments.)
Interchange plus: This option utilizes a smaller flat fee with an additional (and varying) percentage. This is an excellent structure for companies with smaller, more frequent sales, as it’s easier to negotiate rates.
Tiered pricing: This alternative can offer some benefit in the right circumstances, although it is more challenging to negotiate. However, it is easier for merchants to understand how much they owe when you only have three pricing tiers for various transactions.
Even if an industry giant offers free installation or next-day set-up, a 3.5% processing fee could destroy companies in several industries, especially for small, local businesses. For that reason, it’s important to seek a processing service that offers value.
Value is based on context and what fits your customers. You want a solution you know your customers will use—information you can find out by surveying your customers or researching your competition or industry. And you want something that fits the way you do business.
Take time to ask the processing company some questions, especially related to payment structure and hidden fees, which could potentially save your company thousands of dollars.
It’s clear that credit card processing services are important for business growth. Fortunately, it’s easier than ever to get started, so set your company up for success today.
Contact us with any questions about setting up credit card payments in 2022.