Pros and Cons of Accepting Credit Cards

In this day and age, many consumers are making a conscious choice to steer clear of credit card debt.  Merchants who are on the fence as to whether they should accept credit cards as a method of payment are warned that this trend does not necessarily mean customers are not using credit cards.  In fact, there remain millions of consumers who will continue to use credit cards, just in a more responsible manner.  With this in mind, if a business owner decides to not accept credit cards, they may be missing out on a large volume of sales.  Credit card processing fees are generally the main reason merchants are hesitant to accept credit cards.  It is true that it does cost money to accept credit cards but for most business owners the cost is well worth the convenience and security of accepting credit card payments.  Here we look at the pros and cons of accepting credit card payments.

Pros

Merchants can enjoy the following benefits by accepting credit cards at their place of business:

• Secure transaction for customers-  Many customers continue to use their credit card for payments due to the increased security of this type of transaction.  Once that credit card is swiped, the credit card processing system tracks the transaction which can provide a level of protection should the customer find themselves needing to dispute the charge.  With cash transactions, the consumer may or may not have a chance to rectify a problem at a later date.
• Convenient-  For the average shopper, impulse buys are made possible with a credit card.  Not all people travel with large sums of cash on hand, which makes it impossible to react to a real-time response to an item on sale.  By accepting credit cards, merchants can capitalize on these impulse purchases.
• Guaranteed payment-  Short of a dispute, when a customer uses a credit card to pay for a purchase, the merchant is able to confirm payment immediately.

Cons

Just as there are benefits to accepting credit cards, there are drawbacks that should be considered as well.

• Credit card processing fees-  As previously mentioned, the credit card processing fees charged to a merchant account are often the biggest deterrent.  While merchant accounts can be costly to maintain, it is also possible to reduce these costs.  For the average business owner, the cost of accepting credit cards is worth the increase in sales.
• Less protection for merchants-  Where credit card purchases offer increased security to customers, merchants do not always reap the same benefits.  This may come in the form of chargebacks (where you not only loss money but also pay a fee) or other issues that may result from a disputed charge.
• Increased awareness and training of employees-  Accepting cash is a pretty straight forward transaction.  With credit cards, it can be simple and convenient if your staff is trained and able to implement increased security measures.  Without knowing how to handle credit cards and credit card processing properly, your business may be subject to negative consequences in the event of fraud.

Deciding whether or not to accept credit cards is a personal decision made by each business owner.  By considering the pros and cons, merchants are in a better position to make an informed decision.