Every business wants their customers to make purchases, and on the face of it you would think that the more ways the customer is able to pay, the better. Therefore, every small business has to think whether or not to accept a full range of credit cards or to limit it to just one or two. There are a couple of ways to approach this important issue:

Two Ways of Seeing Things

One the one hand offering a full range of credit cards will prevent your customers going elsewhere and should make it easier to drive sales. This is because those customers that only like using one particular card- perhaps because they receive rewards such as miles or points – may go to one of your competitors if you do not accept the payment option that they prefer to use.

Having said that, it is not quite as simple as it appears, because there are fees to consider. Normally, when you open a merchant account, which enables you to accept credit cards, you will be given the choice as to which cards to accept. However the fees can be somewhat complex, so you need to work out which cards you should offer and which may work out too expensive.

Merchant Account Fees

There are different types of fees, including a set up fee when you open the merchant account, and then a monthly fee, and in some cases an annual fee as well. Usually the merchant account fees do not increase dependant on the number of cards you accept and you can accept Visa, Mastercard and usually Discover, as well as American Express for not additional fee. If you choose just two out of the four it won’t cost you any less. So why not have as many as you can?

Per Transaction Fee

The costs come in as different cards have different fees per transaction and per item, so you should ensure when you set up your merchant account that you go through the pros and cons of each card with the representative from the card processing company. The usual fees are around 1.5% to 3% of each credit card transaction, but some will also have a per item fee of between 14 cents and 25 cents. In addition you need to look at accepting debit cards, which many people prefer to use as well, and fees associated with accepting these kinds of payments are around 21 cents per item and .05% of the value of the transaction, plus a one cent fraud prevention payment.

Not all cards of a particular type – say Visa – have identical charges. But you can’t only accept the cheaper Visa cards. Once you decide to take Visa you have to take them all, those with cheaper fees and those with higher. When it comes to expense, American Express is the most expensive of all major credit cards the cards as far as merchant fees is concerned, as it is viewed as a premium card which is used by more affluent customers. But, once again, deciding to accept the card usually costs the business nothing.

Give us a call with any questions about your credit card and payment processing needs at 1-866-944-3244. Or visit our website www.servistree.com. Keep up with the latest news and information on credit card processing and mobile payments along with other small business news by subscribing to our blog by clicking here.