If you are a small business owner and accept credit card or debit card for payments, there are a few things that you should know, especially about credit card processing. Ideally, if you accept card payments you will have to choose the best and work with a credit card processing company.
Ideally, it can be a daunting task to find the right card processor especially for a small business. However, the process can be made simpler if you make it a point to ask these three questions to your potential partners. This will make it easier for you to take the right decision. These questions are:
- Being a small business, whether or not you should accept credit cards, debit cards or any other digital payment methods
- Why do you need a credit card processing company and pay for their services considering your low income and
- How much will it cost you in the process if you accept credit cards?
If you find that the credit card processing company answers to all these questions successfully, readily and satisfactorily, you can rest assured that you have found an ideal credit card processing company such as Nadapayments that will suit and serve your purpose.
Accepting credit cards
The first thing you should know is whether or not your small business should accept credit cards. Apparently, it may seem that it is already very difficult to run a small business, and it will only add to the difficulties when you accept credit cards for payments, if not making it impossible to run your business. The final choice however is up to you.
However, the truth is that it is almost impossible to survive and sustain in this modern business world if you do not accept credit cards. Why? This is because:
- Most of the people do not carry lots of hard cash with them
- Paying for a purchase through credit card or debit card is most convenient and safe and
- Payments are made and received instantly just as paying and receiving liquid money hand to hand.
Moreover, since most of the businesses now are done online even by business that operates from a physical shop, therefore making payments can be an issue. This is resolved only when you accept credit cards payment. This means, if you do not accept credit and debit card payments, you will run at a high risk of losing out on a major portion of your customers and a large percentage of sales.
Few facts to know
According to a 2017 Federal Reserve Payments Study report it is seen that there is a significant rise in the number of credit card payments. It showed that:
- Total amount of credit card payments increased from 103.5 billion in 2015 to 111.1 billion in 2016 and
- This also showed that 22% of this amounts are remote payments.
It also showed a rise in the number of mobile wallet users as well. Considering only the Apple Pay users, there is a significant jump noticed from 15 million in 2015 to 86 million by the end of 2017.
- There is also a significant increase in the number of accepting digital payment methods and that includes the latest, contactless card payment.
- In addition to that there is a rise in the number of digital wallets such as PayPal showing how fast these are becoming the most preferred payment option for the customers.
The reason for the rise of such ‘cashless’ cash transaction is that all these payment processes are not only useful but also very fast. This is because these payment processes connect the businesses directly to the banking info of the customer while receiving and sending payments.
All these show that it is absolutely essential for a business to accept payments through credit and debit cards. In fact, it is an ideal payment option for any e-commerce business, small or large. The stats show that nearly all small businesses and merchants have already taken up this approach and have implemented the Near Field Communication or NFC technology that is essential for accepting these types of payments.
The cost factor
If you are wondering about the cost involved in hiring such services, do not fret. The cost of processing these payments is quite low. In fact, it is the ease of integration into the most websites as well as different useful payment gateways make it even cheaper and beneficial. You can even choose the mobile payment option for that matter and offer to your customers to provide them with a better and higher shopping experience.
However, the credit card processing companies will charge you for their services under different heads such as:
- Setup fees: This may vary according to the payment processing company you choose. Few may not charge you such a fee.
- Interchange fees: These are the fees charged by the payment processors for each transaction. It can range anywhere between 2 and 3%, depending on whether the purchases are made in person or online or over the phone.
- Monthly minimum fees: This is the minimum monthly requirement of the credit card processing companies that ranges between $10 and $25. If you do not meet this requirement, you will have to cover the difference.
- Monthly statement fees: This is the fee charged when you ask for a monthly statement from the payment processors. You can opt for an electronic alternative if the processor provides to save on this fee.
- Early termination fees: If you cancel your contract earlier that the specified date, you will have to pay this fee that may amount to thousands of dollars. If you want to avoid such expenses and long term contracts, select a credit card processing company that offers flexible options such as a month-to-month service.
On the whole the fees for credit card processing are on the rise. All these fees and charges will depend on a number of factors such as the transaction amount, way of processing the payment and of course the pricing model of the credit card processor.