If you’re a business owner who hasn’t set up a credit card payment processing yet and more people are asking you if you accept credit cards, then maybe it’s time for you to start setting that up. By not accepting payment through credit cards, you’re missing out on many sales.
The technology involving payment is constantly evolving, and not keeping up with its pace might mean life and death for your business. But you can’t blame yourself if you’re skeptical about the whole thing. It’s new and looks complicated. However, in reality, it isn’t.
The people involved with the authorization and settlement are the merchant, the cardholder, the acquiring bank, the issuing bank, and the card associations. If you’re wondering, the acquiring bank is the bank your business is associated with, while the issuing bank is the cardholder’s bank.
If you have a credit card yourself, you should already be familiar with how a credit card works. You can use the credit card for purchases, and that purchase will be registered in your account, which you will pay later on along with other fees and interest. So how does this all work?
First, a cardholder will begin the transaction through purchase and presenting their credit card to the merchant. The merchant will then use their credit card machine, gateway, or software to transmit the cardholder’s information to their acquiring bank. The acquiring bank would then capture the information and route it to the card associations.
The information would then be sent to the issuing bank for checking. If the information is right and the cardholder has sufficient funds or balance. The issuer would then transmit it back to the card association and then back to the software or credit card machine that the merchant is using.
Sounds complicated? Sure is, but you don’t have to look further into the technical stuff. You must be wondering how long this process takes. In reality, it only takes a few seconds. This all sounds good and all, but why should you start accepting credit card payments? Here are some reasons why.
As mentioned earlier, you’re losing a lot of business from your potential customers by not accepting credit card payments. With that said, one of the biggest benefits of accepting credit card payments is that your overall sales would increase. This is mainly because your demographic of customers will widen.
It’s no secret that more and more people are opting to buy a card because it’s much easier and faster than bringing cash with you everywhere. Also, not all people bring a lot of cash, so you’ll just end up losing more customers if you don’t accept credit card payments.
If you’re not accepting credit card payments and the competition does, then you’re losing a lot of customers to your competitor. No matter how good your products or services are, you’ll be losing some of your customers if they are a hassle to pay for. And eventually, because of your inability to keep up with the times, you’ll lose all of the customers you have left.
Nowadays, the amount of market share that involves people paying by cash is dwindling, and eventually, everyone will be paying through credit cards. So if you see that your competition is accepting credit card payments and you’re not, you should start doing so.
When a business is accepting credit card payments, credibility comes with it. For a business to accept credit card payments, they need to set up a merchant account from their acquiring bank. This means that a bank did the underwriting on the business and sees it credible enough to have business with them.
Hence, this gives consumers reassurance that your business is legit and trustworthy. Also, you’ll be able to accept from several credit card associations like MasterCard, AMEX, Visa, etc., and other CardPaymentOptions like mobile banking and bank transfers.
Small businesses that are so busy that they lose track of their customers’ history tend to not get a chance to have business again with their customers. Keeping track of your customers’ business is important if you want to build trust with them. If you know your customers well, they will feel safe and happy enough to do business with you again.
Also, this is important if you want to learn about customer trends like their purchasing patterns throughout various seasons like Halloween or the Christmas holidays. By learning these trends, you’ll be able to analyze and run promotional stuff and bonuses during the most optimal times.
The market is constantly changing, especially in terms of technology. As a business owner, this should also be on your mind. By keeping up with the trends, you’ll gain a lot more business from your customer, and you’ll be able to keep up with the competition. Remember, in the market, those who are afraid of change might as well not do business at all.