Consumers are using plastic more than cash, and this is costing small businesses.
Most merchant companies charge 5% on everything a business earns from credit card sales, through processing costs, interchange costs and statement fees.
Essentially, the credit card companies become a middleman for each sale that you make, gouging your profits.
Plus, it takes a month for small businesses to receive payment from credit card sales.
This delay has a direct impact on your small business, whether it be having enough money for payroll, inventory or another expense.
And it’d cost your small business even more money to deny consumers their preferred payment method.
This puts small businesses in a sticky situation. But all is not lost.
Here’s how your small business can work around the cost of credit cards.
That’s right —credit card companies charge more when consumers manually input information.
Thieves can easily obtain credit card information and purchase goods without having the physical card. The chance of fraud increases, and so does the price.
Most credit cards have a magnetic stripe with security measures, but these are avoided when you manually input information.
Always swipe credit cards.
If you’re selling a product at a 5% profit, credit card charges will actually nullify your sale. It’s even worse when you account for the upkeep fees of your business.
This doesn’t make any business sense.
You can avoid this if you set a minimum spending limit for credit card transactions. This will encourage consumers to spend more, and will ensure that your profits are safe.
It’s especially convenient when you consider that many don’t have cash on them. More credit card sales will often lead to better discounts on credit card fees from merchant companies.
What do phone plans, salary raises and supplier prices have in common?
It pays to negotiate in all three.
Small businesses should treat credit card processors like any other expense, and scout the market.
You’ll want to find the perfect balance of service and low cost, depending on your business.
Mobile payment processors are on the rise, and becoming a viable option for many small businesses
Mobile payment processors are on the rise, and becoming a viable option for many small businesses.
These devices plug into smartphones or tablets, and act as a payment processor for credit cards. Some of these mobile card readers even count inventory, and may be worth the investment depending on your business.
Credit cards don’t have to be an obstacle for small businesses.
Today’s consumers are all about convenience and experience, and this is something small businesses can offer.
Not only are mobile payment processors getting better by the day, they’re also a cool experience for people who are used to credit cards.
And if they’re still crazy for credit cards, you can make that work too.
Do your homework and make sure you find the best possible deal with your credit card processor. And make sure that you swipe for each transaction, so you don’t get charged extra.
Avoiding the hidden costs of credit cards will help your small business beat your competition and boost your consumer base.
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