If you operate a small business, it is arguably very important to make your products or services as accessible to as much of the target market as possible. Many small businesses meet that need by accepting credit cards from their customers. However, some misinformed small business owners are persuaded not to accept credit cards and decide cash payments seem simpler, if perhaps not very practical. Unfortunately though, that decision is frequently driven by pervasive myths about payment processing.
Will Be Too Hard to Remain Compliant
Even before they begin pondering the possibility of accepting credit card payments, small business owners tend to have at least a basic awareness that they will have to put a system in place for capturing and storing sensitive data securely. Fortunately, the necessary encryption is already built into leading POS systems, so there is nothing left to do on your end in terms of compliance.
Payment Processing Is Too Costly
Perhaps you have heard complaints from fellow small business owners as they discussed having to pay processing fees and deal with interchange rates. They probably grumbled those things did not concern them until they started accepting credit cards.
Indeed, there will be some associated fees for payment processing. However, it is important to realize how many of your customers you may not be able to serve when only accepting cash at your establishment.
Generally, only about five percent of a transaction goes towards fees. Consider though, how many customers would likely go elsewhere if they learned you only accept cash transactions and that things were not likely to change soon.
In most cases, customers do not get too upset if they try to pay for something at a company by using a credit card and discover the payment system is out of service. However, if you tell people they will never have the option to buy something at your business via credit cards, they may take their patronage elsewhere because that is more convenient.
Funds Will Take a While to Reach You
Another common misconception is that small business owners will have to wait a long time before seeing the funds associated with credit card transactions. In reality, once you swipe a card, an instant connection takes place between your credit card processor and the cardholder’s issuing bank. Once approval is granted for that transaction, the money immediately gets transferred from the bank to the payment processor. After that, you usually only have to wait a day or two to receive the funds.
Buying Expensive Equipment Is Essential
Expensive equipment is another detractor when small business owners are deciding whether to begin processing credit cards. However, that should not be the case. People may be able to:
- Make monthly payments for equipment.
- Rent or lease POS equipment.
- Use mobile devices they already own to accept credit card payments.
Hopefully this information has emphasized the need to do careful research instead of immediately trusting common misconceptions. By understanding what is available in the payment processing industry, you could help your business succeed and be more inclusive.