Benefits of a Merchant Account
Credit cards, debit cards, gift cards and all other types of “swipe-able” payment cards have changed the face of business around the globe. The number of people paying by cash, or with the rapidly disappearing paper check, is declining year by year, even month by month.
Businesses without a merchant account are placing themselves in jeopardy. They stand to lose out on a tremendous number of possible sales opportunities if they are not able to take these various payment cards to complete a sale. To maintain its competitive standing, a business simply must have a merchant account, the benefits of which are many and varied.
Customer Options, Mutual Benefits
The majority of merchants worldwide are now accepting these kinds of payment cards. Notwithstanding the benefits to the merchant, there are also compelling advantages for the customer, who is the most important person in the retail relationship, after all.
One basic benefit to the customer is that they are empowered when there are more, not fewer, payment choices. Just displaying the credit card emblems on the front window can help businesses take advantage of this sense of empowerment, as it communicates to consumers that they are in charge of the transaction at that place of business.
Studies have also shown that the average sale in a business rises with the availability of additional payment methods. One reason is that the customer doesn’t need to carry cash and is therefore free of any self-imposed “limitation” on the shopping budget. Not carrying sums of cash, of course, is safer, too.
Speeding up the checkout process with the efficiency and convenience of payment cards is a “win-win” situation, where businesses and consumers both benefit. In fact, the retail environment that best meets consumers’ payment styles will produce benefits for both the business and its customers.
Business benefits
Businesses gain in many ways by having merchant accounts. Besides the ability to take advantage of more payment types, completing sales with customer payment cards protects the merchant from potential bad check losses.
It is well established that businesses that suffer fewer thefts, bad checks or credit card chargebacks can maintain a lower overall cost of doing business. It is entirely possible that these savings could be sufficient to allow reduced prices compared to competitors who are still experiencing those losses. If a business can quantify these savings, it can advertise them, as well.
Some businesses have postponed opening a merchant account because of the costs. There are real but predictable costs to have a merchant account, but it is a rare business that will not benefit overall from taking payment cards. The costs of the terminals, the fees and everything else will still not be enough to offset the large amount of new business that a merchant account will attract.
Besides the foregoing benefits, one simple fact has been established to a high degree of certainty over the past 40 years. People spend more money when they are paying with a credit or debit card than they do when paying with cash or check. There is little question that for the vast majority of businesses, the increased revenue will more than compensate for the merchant account costs.
Bottom-line perceptions
Frankly, it is rare today that a company, of any size, does not have a merchant account. In fact, the credit card culture is so deeply ingrained into our greater national identity that people think it strange when a company does not take payment cards for purchases.
Therefore, one bottom-line reason for getting a merchant account, as if the prospect of increased sales is not enough, is to allay any consumer fears about the strength, modernity or capabilities of your business. Merchant accounts provide a business an additional, measurable benefit by way of a close association with nationally-known credit card associations, such as Visa and MasterCard.
In these economic times, it is critical for businesses to project an image of strength, dependability and fiscal health. Having a merchant account that provides financial options to customers, who then view your business as both friendly and secure, is a very positive component of a winning business strategy. And today, businesses need every good strategy they can get.
