Does your business accept cash, credit cards and checks? As a business owner, you need to be smart about how you handle these transactions. Learn about how you can manage these transactions in our three part article series from the Small Business Administration.
ACCEPTING CREDIT CARDS
Credit and debit cards are popular, convenient, flexible, and havebecome increasingly important in business commerce. If your business is considering what forms of payment to accept, or if you'd like to expand the payment options of your cash-only business, be sure to go over the pros and cons of accepting card payments.
Pros of Accepting Card Payments:
- Card payments are evolving into the most common method of customer payment.
- Businesses can easily accept card payments.
- The convenience of using credit cards generally increases the likelihood of consumer "impulse purchases," which ultimately contributes to an increase in a business's average sale. Customers are more likely to make these purchases if they have access to credit or their available bank account funds.
Cons of Accepting Card Payments:
- Card payments come with an increased risk of fraud. Although
- Businesses that accept card payments encounter small processing fees for purchase transactions. These fees seem insignificant but they can certainly add up, especially if your business accepts a lot of small purchases on credit cards. Setting up the necessary equipment to accept cards also carries additional costs.
- Card transactions add another layer of detail to your business's bookkeeping practices. Your business will have to take into account the additional time and resources it takes to maintain these records.
The Bottom Line
Accepting card payments will, at least initially, cost your business money and add extra processes in your daily operations. Many small business owners look at this as a necessary operating expense. As card payments become more popular, customers will likely begin to expect a plastic option as a rule, rather than a courtesy.