Advantages and Disadvantages of Credit Card Transaction Processing

Advantages and Disadvantages of Credit Card Transaction Processing

Credit card transaction processing has its advantages and its disadvantages but they are crucial for a merchant as they are globally accepted.

SureSwipe is a credit card transaction processing machine provider within South Africa. They offer the machines that your business needs to take and accept credit cards.

As a business it can be a huge disadvantage to not take credit cards as your competitors may.

However credit card transaction processing has advantages and disadvantages to them.

Advantages

• If you decide to accept credit cards then you have opened your business to many people who own and prefer to pay with credit cards.
• If you are a merchant in a tourist hot spot you can increase sales by taking credit cards as they can be processed from anywhere in the world. This is then convenient for travellers as they can pay instantly instead of converting currency.
• Impulse buys feature more as well as customers spending more when they are able to pay using a credit card.

 

Disadvantages

• When a credit card is used the issuer and the payment network get an interchange fee, which is a cut of the sales.
• A chargeback is a complaint by a customer to their credit card issuer and happens when they are not satisfied with the product or service. All credit card transactions are subject to this and can happen six months after the purchase. The merchant will need to prove the purchase was legitimate.

If you are thinking about credit card transaction processing machines for your business there are some things that you will need to take into account.

Think About

The interchange fees charged by credit card payment networks can be quite high but retailers see the pros of accepting credit cards and have to accept the fees so that they are able to business.

This fee also pays for maintenance of the network and credit card promotions that are on offer like that of reward programs and discounts.

At first being able to accept credit cards will cost your business and you will need to spend extra time in processing transactions. You will need to open a merchant account which may need a deposit and you will also need to get the equipment to accept them.

If you experience a high sales volume each month then the interchange fee can be negotiated.

As a business you can accept credit cards and also if a customer pays in cash you could consider a discount. If a customer pays with a credit card though a penalty should not be imposed on them.

You need to look at various credit card transaction processing merchants so that you can compare their offerings and fees.

Accepting cards will most likely increase sales as it is more convenient for many to pay this way.