The payment landscape is shifting in every direction. From mobile payments and online transactions to updated point of sale and retail technologies, the way consumers are paying for their goods is changing. For businesses, this means changing the way they do business and moving with change of winds. One of the most popular forms of payments are via credit cards, and for the meantime (at least), that isn’t going to change. However, the method in which credit card processing occurs has already begun to shift. Here are trends in credit card processing happening right now.
Credit Card Processing: 4 key points to consider when choosing between a dedicated or aggregated merchant account
Offering your customers the option to pay with a credit card is a great way to enhance revenue for your small business. Your customers want the points associated with rewards cards, and they want to manage their own cash flow by floating balances or financing their purchases. Allowing them to use credit cards accomplishes both.
This is what every small business owner wants to hear and hopes that it’s this easy. (Many will say it’s not) One of the first obstacles you will come across is how you will accept payment from your customers (Makes sense, right?). Now the questions come out;
- “What type of payments should I accept?”
- “What are the pros and cons of these payment types?”
- “What are the costs of accepting payments?”
Last week, I walked out of our office to see Blake Street buzzing with people adorned in purple and black jerseys. As is standard this time of year, being located three blocks from Coors Field, we get to witness fans heading over to the game and all of the hot dog, peanut, and ticket sales that proliferate in the blocks surrounding.
Walking past a ticket “broker,” I overheard him talking to man wearing a Cincinnati jersey (even though we were playing the Mets) discussing the option of accepting credit cards for his ticket sales.
“I’ve thought about getting one of those things,” he said. I can only assume he was referring to a mobile credit card reader. “But cash is so easy for me right now.”
The chargeback: A forcible reversal of funds typically due to a credit card holder’s dispute of the transaction.
Originally established in 1968 as a credit card holder’s protection against clerical error, the chargeback has become a major tool in the fight against identity theft, especially for online credit card processing and ACH transactions.
For a small business, though, credit card processing chargebacks can be a huge headache. Don’t get me wrong, we’re all for consumer protection, but as you can see below, they can be also be caused by miscommunication or flat out consumer fraud. At worst, chargebacks can affect a small business’ ability to maintain a merchant account and accept future credit card or ACH payments. Merchant account providers can also impose steep fines associated with high chargeback rates (upwards of 1% of all transactions) or put funds on a hold.
So, how can you help protect your business and maintain good standings with your merchant account provider?
Choosing the right online credit card processing service will save you time, diversify your ability to collect payments and ultimately increase your ability to generate revenue.
Choosing the wrong processor will leave you paying higher fees, confuse your customers and put you on hold for hours waiting for a customer service rep.
When you’re a small business, it’s difficult to find the right online credit card processor with so many options available. One Google search will pull up such an endless list of companies, the research could go on for days – unless you know what to look for.
A new report shows Americans are cutting down their debt accumulated from credit card payments, but some states are reducing it more than others.
According to the study from Credit Karma, Americans paid down their credit cards 11 percent more in 2011 than in 2010, a statistic financial analysts typically use to diagnose the overall health of the economy. While more responsible spending is a good thing, it can also be a sign of consumers lacking confidence in the economy, which can mean slow growth for businesses.
Online analyst, 24/7 Wall St., studied the credit card payment patterns of every state to determine the five states with citizens who carry the least amount of debt on their credit cards.
Debit card processing is down and credit card processing is climbing, according to an interview with senior vice president of First Data, Silvio Tavares. This trend, he explains, has taken a 180 degree turn since the start of the Great Recession of 2008.
Over the last three quarters in 2011, credit card purchases grew 8.2 percent, 9 percent and 10.6 percent, respectively. Over the same three quarters, growth in debit card usage dropped from 9.5 percent to 8.3 percent and then to 5.9 percent.
Overall, this represents a 27.8 percent increase in credit card purchases, and a 23.7 percent decrease in debit card purchases – a stark contrast to 2008.
“Credit is back in favor,” Tavares said. “Consumers have spent the last couple of years de-leveraging and reducing credit card use, but during the past month — and since April [of this year] — they’ve been using their credit cards more and are starting to return to pre-recession buying habits.”