If you have a small business you need to accept credit cards.
Wait a sec, let me restart by asking you a question.
And be honest with yourself when you answer.
Why did you start your business?
I don’t mean the circumstances that led to it.
I mean what was your bottom-line desire?
- I started my accounting business to make money.
- I started this site to make money.
- I started my personal finance blog to make money.
Yes, there were secondary intentions as well.
- I wanted bloggers & freelancers to have an accountant who “got” them.
- I wanted you people out there to be able to get complete information about entrepreneurship, not just the sunshine and rainbows that most people bring up.
- I wanted people to actually learn about personal finance topics, not just be mesmerized by storytellers and sold bank accounts or credit cards.
But I wanted to make money first and foremost.
Giving my services away for free all the time was not in my plans.
I’d guess that most of you also wanted to make money with your businesses.
You know what?
There’s nothing wrong with that!
But there is something wrong with how many people approach their businesses.
It has to do with how they get paid…or don’t get paid as the case may be.
Not Just Cash Or Check Anymore
When I was coming up in the world (and no, I’m not that old but it does seem like a heck of a long time ago) small businesses had only 2 real options of getting paid:
- Cash, or
- Check (bank checks and money orders fall into this category as well)
There was no other option for the freelancer or mom-and-pop outfit to collect their money.
No one outside of the largest retail stores was able to accept credit cards (which we’ll discuss in a little bit).
There was no Square.
Your bank wasn’t offering a method to accept credit cards either.
Those things didn’t even exist until the last decade or so of the 20th century!
You didn’t have all of these marketers calling you offering you great rates on merchant services account.
There was no Google that would return thousands of results for a search on “merchant services account” or “accept credit cards”
They had to send a bill and wait, hoping that they weren’t going to be stiffed, the checks didn’t bounce or get lost in the mail.
Or they demanded payment on the spot and walk around with the checks or wads of cash.
If you know me or read this site for any amount of time, you’ll know that I hate cash.
Read the article in that link to see why–I really don’t think everyone wants me to rehash it all right here lol.
Size Doesn’t Matter (Neither Does Type)
I’m sure there are going to be people reading this thinking:
I’m just a one-person show, too small to accept credit cards
No one cares how many people are in your organization, they just want to pay how they want to pay.
Then there will be others who say something like:
I’m in cash-only industry, we don’t accept credit cards
Things change and I bet you there are plenty of people who would be willing to pay you in other ways if you just give them the chance.
Look, I’ve seen it all.
Personally, my accounting business is really just me, but I’m more than enough to warrant having the ability to accept credit cards for payment.
I don’t have to worry about:
- Payments getting lost in the mail
- Weather delaying the delivery of mail (ie: during hurricane season)
- Payments coming from across the country and taking “forever”
- Bounced checks
I also don’t have to wait to “have enough money to make a trip to the bank worthwhile” either.
I’ve also seen people who thought they were good just accepting cash–landscapers and restaurants–and they not only saw growth but also spent less time on banking tasks such as counting and verifying, then driving to and from the bank.
Having the money deposited automatically into your bank account also increases your cash flow, where those people who do as I referenced 2 sentences ago–waiting to have “enough” to take to the bank–may be hamstrung until they’re forced to make the deposit.
Yes, I know there is such a thing as mobile deposits but not all smaller banks or credit unions have that capability, and yes, there are a lot of folks out there who prefer those to the “giant banks” even with fewer offerings. Plus there are still per-item and daily limits, not to mention that sometimes the cameras simply can’t read the data.
Technology Makes Accepting Credit Cards Simple
Merchant services accounts today also don’t have to come with a hefty investment or long-term contract agreement for the equipment.
You don’t have to have a fancy POS system or deal with those nasty carbon forms.
You don’t need anything more than a smartphone or tablet to accept credit cards today.
Heck, you don’t even have to be awake to get paid!
That’s how far we’ve come.
It’s almost impossible not to get paid these days.
Consider this: I use QuickBooks Online for my own accounting and it automatically sends out invoices each month before I even wake up. My clients receive an email with a link to pay the invoice and I get an email when it’s paid. I literally collect my money while I sleep just because I accept credit cards.
That is of course if you purposefully make it hard, and that is exactly why you should…
Accept Credit Cards Or Lose Money
I’ve heard all of the excuses:
I don’t want to pay the fees to accept credit cards.
I only use cash, so I won’t accept credit cards.
I already take PayPal so why should I accept credit cards?
Well, guess what, it’s still a ridiculous business decision!
Want to know why?
Because not everyone wants to create a PayPal account.
Because not everyone uses cash or checks.
Because your personal preferences shouldn’t be forced on others.
Because keeping even 70% of a credit card payment is better than 100% of not getting paid at all!!!
Look, I’m not going to get into the benefits of one vs. the other here (but you can read my thoughts on credit cards vs. cash if you’d like).
With the way rewards and benefits are being offered to credit card users, there is a good reason for so many people to choose to put all of their regular purchases on plastic.
Some people, like myself, sometimes refuse to do business with anyone that won’t take my credit card as payment (trust me, I’ve already dumped my dry cleaner for that very reason).
You have to make paying you as convenient as finding you, or else you’re going to lose out on a lot of business opportunities.
And just for the record, accepting PayPal or other kinds of transfer apps isn’t the same, because when you become a merchant, you select the type of business you run, and people get bonus rewards for spending in certain businesses.
So, lose that excuse right away, especially since not everyone who has a credit card uses PayPal, and accept credit cards.
Nor would some people want to, so don’t force them into it or you may lose them.
Accepting Credit Cards Is About Your Customers
Say it with me:
When you start a business everything becomes about the customer and you should be removed from the equation.
If not, then you may want to rethink running a business if you can’t put the customer first.
But that’s a debate for another day.
Let me ask you this: do you remember a little piece of advice that went something like…
Make it impossible for potential customers to not be able to contact you
You know how everyone who built websites would say you need to have your contact info all over the site and have a menu item linking to your contact page?
The reason for this was because it was smart to give potential business zero excuses for not contacting you!
The same goes for getting paid.
MAKE IT IMPOSSIBLE FOR PEOPLE TO NOT BE ABLE TO PAY YOU!!!
Look, I ‘ve already said that I hate cash and it’s equivalent.
As an accountant, I despise PayPal as well.
Even still, I will NEVER EVER EVER EVER EEEEEEEEEVVVVVVEEEEEEERRRR say no to those forms of payment!’
- It’s not about me, it’s about my clients
- Money is money when it comes in and I will use whatever resources necessary to collect it
- It’s not about me
I don’t care if you had a bad experience with credit before.
I don’t care if you get skeeved by the tactile feel of money.
I simply don’t care, and neither do your customers.
You need to put your own feelings in a box and allow your customers to pay you however the heck they want, and that means you should accept credit cards to accommodate customers.
Merchant Account Fees
Worried about the cost to accept credit cards as payments?
Don’t like the idea of having to pay merchant account fees?
There’s a wonderfully simple answer:
Consider the cost to accept credit cards when setting freelance rates or the price for whatever goods or services you sell.
All you have to do is increase your fees/rates/prices by a small percentage across the board–typically whatever your merchant account fees are.
That way, if customers do want to pay you with a credit card, you’ve already factored merchant account fees into the price and your net will back to the full value you envisioned.
Caution: What you don’t want to do is to announce that you are charging people a separate fee to accept credit cards so you can recoup the merchant account fee. They will get pissed and not give you their business. They may actually tell their circle about it and warn them not to give you their business either. And you don’t want to do anything illegal or that violates the merchant services account agreement, so be careful.
Do it the right way, and you’ll have nothing to worry about.
Not only will you keep people happy, but by accounting for merchant account fees ahead of time, you’ll be able to net what you actually want to for your goods and services.
The message is simple…you should accept credit cards regardless of any excuse you come up with.
And if you’re a tiny business, the last thing you want to do is limit prospects by not allowing them to pay you how they want.
After all, what kind of entrepreneur turns down a customer who is willing to actually pay for goods/services?
Look, “the old ways” are great when it comes to putting people over profits and creating relationships versus looking at customers as sources of income.
But there are times when those old ways are a total waste of time and limit your growth possibilities.
Plus the ability to accept credit cards is still fairly new.
So, move into the modern age with the rest of us business owners 😉
Do you refuse to take a certain form of payment in your business? Does it hamper you in any way that you’ve noticed? How about when you want to spend money but can’t use your preferred method of payment? Do you walk away or give in and pay using whatever method the vendor will accept?