Despite the availability of other online payment options and direct bank withdrawals, research shows that more than two-thirds of online shoppers prefer to use credit cards for all of their online purchases. Offering frequent flier miles, reward points and other perks for regular users, credit cards are a convenient and often rewarding experience for the shoppers who use them. If your business is not accepting credit cards for online orders, it’s a good bet you’re losing a large share of potential customers.
Credit cards offer more than just a significantly wider base of customers. By accepting credit cards, you can make online transactions move more quickly and more smoothly. Instead of waiting for checks or online bank payments to clear, credit card purchases can be processed in a matter of moments, allowing you to process your orders with confidence.
Credit cards became popular in the mid-19th century with the advent of store-specific charge cards. These cards offered regular shoppers a convenient way to make purchases without having to carry large amounts of cash. Merchants with catalogs, like Sears and Montgomery Ward, were anxious to cash in on the ease offered by charge cards, and soon began accepting telephone orders which were paid for with the store’s charge account. Soon afterward, credit cards became available. Unlike charge cards, which were accepted only at a single merchant, credit cards were accepted at a wide number of retailers and other business establishments, making them especially popular with shoppers whose wallets were becoming burdened with multiple cards from the merchants they patronized.
As the internet has become more widely used and more and more merchants and service providers have turned to the web as a legitimate and highly profitable source of business, more and more consumers have embraced credit cards as a preferred method of payment. As noted previously, merchants who accept credit cards have a significant advantage over those who choose not to accept them as payment.
Processing credit card information is a detailed process that is handled with ease by large credit processing networks. The steps required for a transaction to be approved are fairly straightforward. During the order process, the customer enters his or her credit card number, as well as other account information, including name, address and, in some cases, a personal identification number (or PIN) or card identification number. The card information, as well as the total amount of the transaction, is submitted to the credit card processing company for approval.
Once the transaction is approved, a confirmation number is transmitted to the merchant and the sale is complete. The merchant usually submits receipts to the credit card processing company on a regular basis for reimbursement, although some processing companies have automated this process, as well. The amount of the purchase is then transferred to the merchant account within a few days of the purchase, and often sooner.
Although the actual transfer of funds into the merchant’s account can take two or three days, once the transaction is approved by the credit card processing center, your fees are guaranteed, which means you can process and ship your orders more quickly than with other types of online payment options.
In addition to offering a 24-hour source of information on nearly any subject imaginable, the ease and convenience of online shopping has also resulted in a specific set of expectations from the customers who shop online. Like the instant gratification of the internet itself, online shoppers expect to receive their orders quickly and without delay. This consumer-driven expectation is another reason for merchants to seriously consider opening a merchant account that will allow them to accept credit cards as payment. When orders are delayed as the result of slower forms of payment, such as bank transfers or checks sent via the traditional mail system, customers often grow impatient and become less likely to use vendors that do not offer the option of credit card payments.
While some services offer merchants the option of accepting credit cards, these services may also charges fees that are similar to those fees charged by dedicated credit card processing companies. However, unlike traditional merchant accounts, some services offer another level of corporate red tape to wade through when billing errors occur. Dealing directly with a merchant account provider can help you to avoid the headaches and hassles that can occur when dealing with a third-party account.
Studies show that more and more consumers are turning to the internet for their shopping needs. Offering a wider variety of goods than can be easily accessed in traditional brick-and-mortar stores, as well as offering savings in gasoline costs, online shopping is definitely here to stay. To remain competitive as more and more merchants enter the online shopping space, it’s essential to offer your customers every convenience. To keep your business on top, you need to consider the advantages of opening a merchant account that will allow you to accept online credit card payments with ease.
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