Closing the Sale: The Pros and Cons of Accepting Credit Cards Reviewed by Momizat on . Should you accept credit cards? Most businesses do these days, but not all of them. You’re holding out, but why? While you shouldn’t rush into a new e-POS syste Should you accept credit cards? Most businesses do these days, but not all of them. You’re holding out, but why? While you shouldn’t rush into a new e-POS syste Rating: 0
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Closing the Sale: The Pros and Cons of Accepting Credit Cards

Should you accept credit cards? Most businesses do these days, but not all of them. You’re holding out, but why? While you shouldn’t rush into a new e-POS system just yet, you also shouldn’t dismiss it outright. Here are some things to think about.

Pros and Cons of Accepting Credit Cards

They’re Inexpensive and Easy To Run

Compared to old hardline terminal setups, e-POS and cloud-based systems are a lot cheaper. Old terminal systems cost upwards of $20,000 or more to install, plus monthly or yearly maintenance fees and licensing. However, newer iPad POS systems cost a mere $3,000 to $5,000 to set up, with a nominal monthly fee (for tech support and unlimited licensing and upgrades).

There’s also the cost factor of running all of the cables of a traditional hardware system. Of course, since you don’t accept credit cards now, it isn’t as much a savings as it is a comparative analysis of old tech to new tech.

They Give You A Competitive Advantage

Your competitors are already using POS systems, and many of them are transitioning over to newer iPad POS systems that are cloud-based. What does this mean for you? Well, your competitors are now mobile, because their POS is wireless. They’re also more flexible. They can take both cash and credit or debit.

Your competitors are also more customer-friendly because they cater to their spending behaviors and patterns instead of setting a standard that many people don’t follow as much (cash only). By accepting credit cards, you also make it easier (and possible) to take your business online.

Even if you’re a local business, Pew International’s research shows that many people use mobile to make purchases – even from local businesses.

They Can Make Your Life Easier

Right now, you probably do inventory, accounting, and payroll as separate functions. Maybe you do some of these tasks by hand. A payment processing system, especially e-POS, often integrates multiple aspects of your company into one system. So, for example, you don’t just get a credit card terminal. You also get a time clock for employees, payroll integration, inventory tracking and automated sales syncing across all point-of-service terminals, and automated accounting.

There’s An Increase Risk Of Fraud

For all of its advantages, there are some disadvantages to accepting credit cards. With cash, you’re fairly protected against fraud unless someone tries paying with counterfeit money. With credit and debit cards, chargebacks and fraud are a real concern.

Unfortunately, some individuals take advantage of the consumer protections built into credit transactions by purchasing goods and services and then initiating a chargeback so that they get to keep your product or benefit from your services without paying.

It’s More Expensive Than Accepting Cash

There are fees associated with accepting credit cards, and they can get expensive. Read Authorize.net reviews. You’ll see that many companies charge a flat monthly rate, a flat per-transaction fee, plus a fee as a percentage of the sale.

You could end up losing 2 or 3 percent (sometimes more) of the purchase price to fees. For big ticket items, this ends up being a lot of money. Even on small-ticket items, the percentages add up.

Card Transactions Add To Book Keeping

Sometimes, card transactions can add to bookkeeping, especially if you don’t have a newer POS system that integrates accounting and inventory tracking. That added accounting and bookkeeping could increase your labor costs by at least one employee per year.

If the additional sales don’t at least pay for the additional employee hours, it’s just not worth the added expense. In fact, you don’t just want to “break even” on your credit card transactions. You want to add to your net profit. So, credit card processing makes sense when you’re a high volume merchant, but it’s not always a good move if you have fewer, high-ticket or small ticket, transactions to process.

Jessica Bunn has a strong sense of business as an entrepreneur. Since her first job walking neighborhood dogs, she has striven to find efficient ways to improve her work experience and customer satisfaction.

About The Author

SEO Cunsultent

Muhammad Aamir is an avid learner and online marketing consulting. Including guest blogger, blog posts sailing and link building. Social Profiles: Twitter, Facebook, Google Plus Contact: muhammadaamir2013@gmail.com

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