Cost-Benefit Analysis Of Payment Acceptance
With credit cards being among the consumers’ favored ways of paying, as a retailer, being able to accept card payments should be consider a must. To accept credit cards, you can go through one of the well-known third-party processors like PayPal or WorldPay, or you can go the merchant account services route.
Each could be considered to have their own advantages and disadvantages. For example, if you’re considering a third-party processor, you might find the fees are higher, and depending on the processor you use, customer services aren’t always available to get back to you should you need them in a hurry.
The other popular option is a merchant account. There are considerable benefits to be setting up a merchant account, such as:
Boost Customer Satisfaction & Profits
From your experience working inthe retail environment, you’ll know there are few things more important than keeping your customer satisfied. And customer satisfaction should be among the top priorities for every business owner – without it the business will struggle to grow.
But how can setting up a merchant account enhance your customer satisfaction? There’s several main areas:
- By setting up a merchant account you will be providing your customers with an easy way to pay, and an expanded range of different payment card methods (MasterCard, Visa, Discover and the other major brands).
- The more payment options you offer, the less likely customers are to abandon their ecommerce carts. Research from Baymard Institue shows that 8 percent of shoppers abandon carts due to limited payment options, so accepting credit cards should be considered as an essential for doing business online.
- You can accept a wide range of currencies from your overseas customers, thus relieving the frustrations of international clients who can’t pay in their own currencies. This can be effective in reducing checkout abandonment, which is a major issue for ecommerce retailers.
Being able to do all the above means you can offer your customers a much better level of customer service and you’ll be able to accept a broader range of payments to improve customer choice.
Extra Security Features
Security worries are just as much of a problem for the retailer as they are for the buyer. Consumers are always being exposed to news stories about the next big security concern, and retailers need to be able to reassure their customers that they take their concerns seriously.
There are several ways setting up a merchant account can help to quell these worries:
- First, having a merchant account means you’ll have tools that can highlight potential fraudulent transactions. This protects you as the seller and protects the buyer too.
- With a merchant account, you’ll have a further level of protection through PCI DSS compliance. By using a PCI DSS compliant merchant services provider, the data you send through them will be stored securely, which is essential in times when data breaches are a regular occurrence.
- It can improve in store security too. If you have a bricks and mortar store, by collecting more payments via credit card through a merchant services account, you’ll have less cash on the premises.
- If you use a merchant account for your ecommerce store, you’ll be able to offer your customers a secure online environment to shopping.
Keep Cash Flow Pumping
Every business needs good cash flow if it’s going to survive. And to give it its due, the payments industry has been making a determined effort to quicken the pace of settlements with organizations like NACHA moving towards same day ACH payments, and a faster payments initiative being set up to speed up the payments process.
However, a merchant account can also improve cash flow by providing you with quick settlements; merchant accounts have always been known for their efficiency so the retailer doesn’t have to wait for their money, and the customer doesn’t have to wait for their goods.
- By accepting credit cards, you won’t have to face the delays that are inherent with check payments.
- You’ll can potentially increase your cashflow through increased sales. As more innovative ways come along to allow customers to make quick card payments, the credit card is likely to remain one of the most popular ways to pay.
Access to Better Data Tracking
Every business can benefit from tracking its data more carefully. The data can be used to identify customer spending patterns, peak times and quite times, and even potential problem areas among staffing. Yet, far too many businesses don’t make use of the data they have have access to, and are likely missing out on opportunities to maximize their turnover because of this.
When you have a merchant account you’ll have easy access to this data, and you’ll be better placed to make decisions that can shape your business’s future, such as identifying trends in sales.
A More Professional-Looking Business
There are considerable benefits to setting up a third-party account: it’s quick to do, it’s often free and it’s easy to set up. So, you could simply offer third party payment processing as a payment choice. However, it doesn’t necessarily show that you’re serious about your business, and it might not give the professional impression that you’d like to give to your customers.
One of the top reasons for customers failing to check out is the lack of trust; a secure checkout progress can alleviate some of these concerns. And by conveying a professional image, you’ll instil trust, and it could make all the difference between your customer checking out or not, or choosing whether to buy from your store.
As detailed above, there are several main advantages to setting up a merchant account. And while third party accounts are also an option, as you can see there are substantial benefits to working with a merchant services provider.
By have a cost-effective means of collecting card payments through a merchant account, you won’t be limited to checks, cash and ACH payments. In addition, you’ll have the potential to reach a much wider customer base, which can contribute to a boost in profits.