As a small business owner, there are several reasons why you should strive to install credit card processing facilities in your establishment. Whether you own a brick-and-mortar shop or an online store, the reasons remain the same: being able to accept credit cards will help you increase the probability and speed at which you can increase the size of your clientele base. This is mainly because research shows that:
The same research also shows that about 45% of Millennials, the people who have a lot of disposable income now and are not shy to use it on online purchases and in pursuit of pleasure, would walk out and permanently shop somewhere else if you do not have a credit card facilities. Needless to say, that is a lot of lost potential revenue.
It is clear, as a small business owner, you need to offer credit card processing facilities. Now the question only remains: how do you go about it to ensure that you get the most benefit from the venture?
The Importance of Credit Card Processing for Small Business Owners
Apart from the fact that it makes it easier for you to capture, retain and possibly grow your clientele base, there are several other reasons why having credit card processing facilities as a small business owner is important. Some of these reasons include:
Most importantly, however, is that fact that accepting credit cards makes it very convenient for your customers to do business with your establishment. That being said, let's look at some of the benefits that come with accepting credit cards for your small business.
The Benefits of Credit Card Processing for Small Business Owners
The very first benefit of accepting credit cards to a small business owner that is immediately apparent is that they will have to get a merchant account. The very definition of Merchant Account paints a highly pragmatic financial picture (definition of Merchant Account: A type of bank account that allows a business to accept multiple payment methods including debit, credit, check and even cash). Not only does this give you flexibility but it gives you some freedom as well. You can now advertise to your customers all the different types of payments that are accepted at your establishment.
There is a whole list of other benefits that come with accepting credit card processing for small business owners. These include:
Ultimately, the goal is to make it easier for your customers to find you, do business with you and keep coming back. Having credit card processing facilities set up for your small business will allow you to do all this and more. But before you get all excited about applying for a merchant account and starting to accept credit cards in your small business, there are some things that you need to look out for; mistakes that you need to avoid at all costs.
Five Credit Card Processing Mistakes to Avoid
While some of these mistakes might result in mere inconveniences for you and the client, some of them could have far-reaching consequences that could open the door to fraud and lawsuits. Here are five credit card processing mistakes that you need to avoid at all costs.
Mistake No.1: Not Reading the Fine Print
Nobody likes going through that long page that has the terms and conditions in very small print. The problem is that when you are dealing with such sensitive matters as people billing addresses and credit card details, you need to be fully protected. That means going through the terms and conditions of use as stipulated by the merchant service provider.
These terms and conditions will definitely be bulky, but you cannot under any circumstances just skim over them or sign without fully reading and understanding them. Comb through them with a fine comb and highlight any possible red flags. Ask for clarification of any vague points from the potential service provider and be sure only to sign deals and contracts that you fully understand.
Mistake No.2: Not Understanding the Fees and Charges
Before you put pen to paper, you MUST be very clear on all the associated fees and charges.
The most important question to ask here is whether or not you can get a better deal when it comes to the fees and charges. The only way you can do that is if you take the time to understand all that is involved and required of you as well as what other merchants service providers are offering.
Mistake No.3: Signing Up for a Deal That Includes a 'Volume Requirement'
You might not be aware of this but somewhere within those thousands of pages known as the 'terms and conditions' lies a trap. Some merchant service providers often include a monthly 'volume requirement' that must be met by the small business owners signing a contract with them. Failing to meet this volume requirement will lead to an additional fee or charge.
Now, it would be absolutely understandable; logical even to ask yourself why you would agree to such a deal. Every small business owner knows that as a startup you are not going to make a million dollars in sales every month. In fact, you are going to have months that your sales volumes fluctuate so much that you can't authoritatively pinpoint a certain base figure or amount. So why would you commit, on penalty of additional charges, to meet a certain sales volume?
Mistake No.4: Not Fully Understanding the Plan You Are On
For the most part, almost every credit card processing service provider offers a wide range of plans from which their clients can choose. These plans typically vary in price, charges, fees and what they entail. Simply going for the most affordable plan will not do as you need to find one that actually brings the desired benefits to the table and fits perfectly with your business needs. You need to look at all the available plans and have a representative explain them to you exhaustively before you sign on to any contracts.
Mistake No.5: Not Shopping Around for Options
As much as this sounds like a given for many entrepreneurs, you will be surprised at the sheer number of business owners who are quick to sign on to the very first favorable looking contract without taking the time to look around and see if there are any other options available. The rule of thumb to remember is this: just because it is the cheapest or most cost-effective offer does not mean that it is the best option. In many cases, you will find that a more relatively expensive option is a better fit for your business and therefore should not go for the cheap one.
As we have already mentioned, being able to process credit card payments is critical to the potential growth in clientele base and profits for your business. As much as that is a good thing, you still need to be careful when trying to find and set up this facility.
These are some of the most common mistakes that you should learn to avoid in your quest to do that and run a profitable business. Take your time and find the best possible option available to you; something that will not only offer your clients the convenience in payment methods that they deserve but also ensure that you run a stress-free business in terms of accounting.