Business owners are faced with the decision of whether to accept credit cards for purchases. There are several pros associated with taking credit cards, including a increase in sales and the ability to meet the expectations of customers. There are also some cons, including some additional expense and being susceptible to credit card fraud.
Increased Sales
A benefit of accepting credit cards is that customers may make larger purchases. Since customers aren't required to have the cash at the time of purchase, they may be more inclined to buy something that they might not otherwise consider. Credit cards give them the option of paying for the item over time if they can't pay the balance when the bill is due.
More Marketing Options
Credit cards are not only an advantage but a virtual necessity if you plan on doing business online or over the telephone. Depending on the product or service you are selling, you might be able to conduct your business completely online without the need to set up a traditional store front --- but only if you accept credit cards. Customers can view the product online, make the purchasing decision and complete the transaction by using their credit card.
Meeting Expectations
Another advantage to accepting credit cards is that you'll be meeting the expectations of your customers. Unless they're in a very small store or business, many customers plan to make a purchase with their credit card and will expect that you will be able to accept it. This saves customers the frustration of having to track down an ATM or other payment source on short notice.
More Hassles and Less Freedom
A drawback to accepting credit cards is that the process requires additional bookkeeping and processing steps. Independent-minded business owners may not like the idea of having to follow the rules and processes of a large credit card carrier.
Additional Expenses
Another disadvantage to accepting credit cards is that it results in additional expenses. There are costs associated with acquiring and installing the necessary equipment, and the credit card companies charge a small fee for each transaction. Businesses who process a large amount of smaller sales may find the costs prohibitive.
Fraud
Accepting credit cards carries the risk of fraudulent activities. You can't always tell if the user is the actual owner or the card or someone who has obtained it illegally. When dealing with telephone or Internet transactions, the possibility of fraud is even greater.
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