Credit cards have been used for several decades, with their modern form emerging in the mid-20th century. The concept of credit dates back even further, but it was in the 1950s that the first general-purpose credit card, the Diners Club card, was introduced.
This paved the way for the BankAmericard (now Visa) and Master Charge (now Mastercard) in the late 1950s and early 1960s, respectively. Since then, credit cards have become increasingly prevalent, with advancements in technology such as magnetic stripes, chip-and-PIN, and contactless payments enhancing their convenience and security. Read more on the short history of payments and credit card processing.
Today, credit cards are widely accepted globally, enabling consumers to make purchases, access credit, and participate in the modern economy with ease.
Benefits of merchants accepting credit cards
Credit cards are a ubiquitous and essential form of payment in today’s world. They are widely used by consumers for everyday purchases, from groceries to travel expenses, and by businesses for their sales transactions. Accepting credit cards can bring a wide range of benefits to businesses, both large and small.
Increased Sales Volume: Accepting credit cards allows businesses to reach a broader customer base, including those who prefer to use their credit card for purchases. Customers are more likely to make a purchase when they have the option to pay with a credit card, which can lead to an increase in sales volume for the business. In addition, statistics show that the total sale volume is higher for credit card purchases than other types of purchases.
Improved Cash Flow: When customers pay with a credit card, businesses receive payment within one to several business days, which can help improve cash flow. With cash or checks, businesses have to wait for them to clear before the funds become available, which can take several days.
Enhanced Customer Experience: Accepting credit cards can improve the overall customer experience. Customers appreciate the convenience of paying with a credit card and the security that comes with it. Additionally, accepting credit cards can help businesses avoid the hassle of dealing with checks and cash, which can be time-consuming and sometimes error-prone. This is one reason why there is a declining use of cash.
Reduced Risk of Fraud: Credit cards offer a higher level of security than cash or checks. Accepting credit cards can reduce the risk of fraudulent activities such as counterfeit bills or bounced checks. This can save businesses time and money while also protecting them from potential financial losses.
Access to Valuable Data: Accepting credit cards allows businesses to capture valuable data on their customers’ spending habits. By tracking purchases, businesses can better understand their customers’ needs and preferences, which can inform future marketing strategies and product offerings.
Competitive Advantage: In today’s market, accepting credit cards is a standard business practice. By not accepting credit cards, businesses may be at a competitive disadvantage. Accepting credit cards can signal to customers that a business is up-to-date with the latest technology and payment methods, which can help attract new customers and retain existing ones.
Accepting credit cards can bring many benefits to businesses, from increased sales volume to improved customer experience and reduced risk of fraud. It is a necessary practice in today’s world and can help businesses stay competitive and relevant.
What to be aware of if you accept credit cards
Accepting credit cards offers several benefits for businesses, but it also carries potential risks and drawbacks. Transaction fees can eat into profit margins, while chargebacks and disputes can result in financial losses and administrative burdens.
Handling sensitive customer payment data requires compliance with security standards to prevent breaches. Cash flow delays may occur, and businesses must be vigilant against fraudulent transactions. Compliance requirements, such as PCI DSS, can add additional effort.
Businesses should evaluate these risks and take appropriate measures to minimize them, including implementing secure payment systems, fraud prevention tools, and effective dispute management strategies.
Now, around 85% of adults in the USA and Canada hold a credit card. Overall, as you can see with the popularity of credit cards, the benefits of accepting credit cards greatly outweighs the drawbacks.
Getting the best merchant services provider
TCM is the ideal solution for businesses looking to accept credit cards. With TCM, you gain access to a reliable and secure payment processing platform that offers the lowest transaction fees, maximizing your profitability. The robust fraud detection measures safeguard your business against fraudulent transactions, providing peace of mind.
TCM prioritizes customer support, ensuring any issues or concerns are addressed as fast as you need. The TCM platform is user-friendly and has seamless integration that makes accepting credit cards a hassle-free experience. Using TCM, you can enhance your cash flow, protect customer data, and optimize your payment processing operations, enabling you to focus on growing your business with confidence.
Start accepting credit cards with TCM
- Lowest-cost processing in the industry
- Fund transfers in less than one day
- A full set of payment products to accept payment anytime, anywhere
- World-class customer service
