Many business owners say that when they start taking credit cards as a form of payment, their profits go up quickly. Customers who don't have enough cash on hand can still buy from you with a credit card. Credit cards also make it possible for customers to pay for all of their purchases each month with a credit card or debit card, since many people prefer to make one payment for all of their monthly expenses when they get their statement.
Online businesses benefit a lot from accepting credit cards because customers can pay right away over the Internet, and the business doesn't have to wait for a check to arrive in the mail and then wait for the check to clear the bank before sending out orders.
When service-based businesses start taking credit cards as payment, they will see a big drop in the number of accounts that are past due. When a business sets up a merchant account, they can not only accept credit cards as payment for their professional services, but also ATM and debit cards. Of course, they can still accept checks and cash as payment as well. Basically, you've given customers more ways to pay, and you've given your business more ways to bill and collect money. When you accept credit cards as payment, your business costs go down and your cash flow goes up a lot.
Using Merchant Accounts to cut costs and bring in more cash
If you have a lot of past-due receivables, it's likely that you are having trouble with cash flow. When you give customers the option to pay with a credit card, an ATM card, or a debit card, you will get rid of past-due receivables more quickly.
For big purchases or services that most of your customers might think are expensive, you may need to give your customers the option of making payments on their account. If you don't accept credit cards, you'll have to give the customer credit yourself and hope that they keep paying on time. You can lower your risk by letting the customer pay you in FULL with a credit card. At the same time, you can let the customer make monthly payments on their credit card for their purchase.
When you accept credit cards, your costs go down. Think about this: it will cost you less in transaction fees to take a $60 credit card payment than to make an invoice, print it, and mail it to the customer. (This doesn't even take into account a customer who needs to be reminded several times to pay after the bill has been sent!)
When a business lets customers pay with credit cards, the number of bad debts that business has goes down. That increases cash flow and lowers overhead costs, both of which are important for a business to make more money.
Merchant accounts can be used by businesses of all sizes.
Not too long ago, it was hard to get merchant accounts. In the past, a business had to have a lot of credit card transactions to be able to pay the fees for being able to accept electronic payments. Due to the rise in merchant account providers, setting up merchant accounts is now very cheap, whether you run a large business with a physical location or a small business that only does business online.
