Let’s begin by trying to understand why customers want to pay by electronic means, namely credit and debit cards, and the occasional online transaction.
Reasons people prefer plastic to cash:
- It’s unsafe to walk about town with big wads of money in your purse
- ATMs can have long snaking queues or occasionally run out and leave you stuck
- Credit cards are easy to procure
- It’s easy, convenient, quick and safe with a card
- It’s easy credit.
- The customer has an accurate record of their spending
- It reduces risk or fraud, like the unwitting exchange of counterfeit notes
- It allows the customer a flexible spending capacity that is otherwise restrained with hard cash
- It lets them acquire goods without worrying about having the full sum of money either on their person, or in their account.
- There are reward points and cashback offers with some cards
Instead of rummaging about for small change or crossing the street for an ATM to pay the piddling amount of 4.75 bucks, it’s easier to use a card or even mobile app.
With the increase in card users and the hard promotion of cashless options to boot, what small business owners fail to realise is that the money they think they will lose after paying tax costs and card transaction fees is actually already forfeited in the business they lose by refusing to accept card payment modes.
It’s understandable, there has always been dissent about the additional service charges levied, but with the number of card users, and now the booming of e-commerce, credit/debit cards become unavoidable. Besides, the cost of the opportunity is justified by the benefits. So think of, instead, all the good things that come of it.
- Card payments save everybody time.
- Debit cards have very low or no processing fees and are like using real money.
- Cards minimises risk and fraudulence. You save on handling cash, and the money goes directly to your account.
- You skip the nuisance of credit purchase while acquiring a loyal patronage.
- You extend the spending options of the buyer, increase their purchasing power, and facilitate larger sales.
- It is easier to track taxes through digital receipts.
- You level the playing field with the heavyweights.
Instead of fearing the leap, take measures to ensure you make the best of it.
- Look for a provider whose payment processor suits your business and needs. Some may charge more for the same service, while others may advertise low charges and spring hidden charges on you later.
- Swipe instead of manually entering card details. The latter costs more in fees per transaction because manual entries are more vulnerable to fraud.
- If your business handles smaller transactions, you could impose a minimum base amount for card transactions, but communicate this clearly to your patrons (either verbally or using a well-placed sign board). (Including an extra charge doesn’t bode well with customers and may cause them to return infrequently).
- Obtain a signature.
- Always provide a receipt. It helps a buyer recall what the purchase was for, and in the event of a dispute it helps you represent yourself.
- For online transactions, use end-to-end encryption. Keep sensitive information safe. However, try not to keep credit card information.
Small businesses already face a lot of challenges not just with their rivals but also from larger players who can almost monopolise the industry. So if they refuse to keep up with the change in spending patterns, they will need to think of all the business they are unwittingly providing larger enterprises who offer these facilities. Figure out the best formula you can adopt to offer this protracted payment option while also securing yourself safely.
If you look at it, it’s actually a win-win for both you and the customer!