It wasn’t that long ago that paying by cash and check was the preferred method of payment by most business owners, especially small businesses. Progressive larger businesses, such as department stores, were setting up merchant accounts to make credit card payment options available to their customers as an added service.
However, the credit card processing costs typically outweighed the benefits for business owners that elected to implement solutions other than cash only. Although well received, this service was merely a convenience to their customers and it failed to deliver much value in return.
The times have certainly changed, yet some businesses are still hesitant about setting up credit card processing services. Business owners may have different reasons for continuing to operate as cash only, but here are some common myths and truths regarding merchant accounts:
High Rates & Fees
Myth. As previously stated, this was a concern in the past, but shouldn’t be anymore. For standard low-risk merchants, whether in a brick-and-mortar establishment or online store, rates are very low. Monthly fees are minimal and reasonable.
Myth. Some business owners see fancy, hi-tech equipment that other businesses are using and immediately see dollar signs. Sure, this equipment is a far cry from the old carbon copy machines that take an imprint of the card, but these days technology is cheap. Credit card processing terminals can be purchased for under $300 or leased on a monthly basis. Some merchant account providers will even give away terminals or POS (point of sale) systems to merchants that sign an annual agreement.
Security Risks Too Great
Myth. Of course the Internet and technology increases the risk of credit card fraud, but processing companies have tighter security measures than ever. The latest encryption technology makes it impossible for a thief to intercept and read information in a transaction without the unique decryption key.
Also, major credit card companies like Visa have programs available that will protect merchants in the event of credit card fraud, limiting the merchant’s overall liability.
Getting Approved & Set Up is a Hassle
Myth. In the online age, it’s not uncommon for a business owner to forward required documents to a processor and receive approval that same day. Set up is relatively easy and most processors will handle all the major things, such as integrating an online shopping cart. If a business needs a terminal to swipe cards it can be programmed and sent overnight to a business.
Customers Prefer Cards
Truth. Just as it was a convenience to customers in the past, it’s even more so now. People tend to carry less cash and love the simplicity of paying with debit and credit cards. Studies also show that consumers spend more when a credit card payment option is available.
Statistics show that businesses that have implemented merchant accounts on average yield a 30% increase in sales in the first month. If you are a business owner and are still operating as a cash only business, it’s time to set up a merchant account.
If you have questions or concerns, give us a call. We are well versed in the credit card processing industry and help businesses like yours to find the best merchant account solutions for their needs every day.