Publish Date: September 13, 2022
With today’s technology, accepting payments for your business is causing more and more questions. Everyone has been forced to make changes due to the pandemic, especially small business owners. With the shift moving towards contact free payments, fewer people are using cash.
According to NPD’s most recent “Checkout Receipt Data,” credit cards now make up 82.1% of all retail (in-store) transactions in the U.S. amid coronavirus (up from 78.7% in January of this year).*
Nikki Nelson, Celero Account Executive for Fidelity Bank & Trust poses the question, Do you have to accept credit cards to be successful? “The answer is maybe,” she says. “You have to know your customers and how they prefer to pay. Does your customer base pay with their phone, card, app, watch, cash?” Nelson added.
Business owners, push the following common objections to the side. Think about how your customers prefer to pay and consider these risks and fees:
- "I don't need to accept credit cards, I have Venmo."
Using Venmo for your business is an option for small business owners, but you need to make sure you are using it the right way.
THE RISKS: Do NOT use your personal account to accept payments for your business. Business transactions are only supposed to take place through a business Venmo account. If you use a personal account for business purposes, you are at risk of getting your account suspended or “loss of transaction” which means Venmo will keep that money.
THE FEES: Accepting Venmo for Business is not free. There is a per transaction fee that varies depending on if the purchase is made using the Venmo app or made online using the Braintree gateway or PayPal Checkout.
- “I just take a check if someone doesn’t have cash. That doesn’t cost me anything.”
Accepting checks is another option for small businesses, but there are some risks and costs involved as well.Be sure to have procedures in place to protect your money.
THE RISKS: If you accept a check for goods or services and that check turns out to be a bad check. The check could be bad for several reasons including insufficient funds, frozen account, or the check being fraudulent. Please take precautions such as asking for ID, asking for their contact information, limiting checks to local banks, and talking to Your Hometown Bank for some tips on spotting a fraudulent check.
THE FEES: Accepting checks isn’t always free. Some business accounts charge for each check deposited into the account. There are also insufficient check fees, the time taking checks to the bank (if you are still “taking” checks to the bank, talk to us about TimeSaver Deposit).
- “I’m not good with technology, I can’t figure out the credit card terminal.”
Technology has come a long way and can be difficult to operate, but there is hope. The first thing you should do before choosing a processor or switching processors is ask your trusted Fidelity Bank employee for guidance in how to choose a processor.
THE RISKS: If you sign with this processor, do they have U.S. based customer service to help me with any problems? Is there a local representative that can come into my business and help me set up the machine and learn how to use it? Is the equipment compatible with my current Point of Sale System?
THE FEES: Accepting credit cards can be expensive if you don’t know what hidden fees to look for and ask about before signing. Always ask the following: What is the monthly fee? What is my rate, will that change, how often? What happens if a customer disputes a charge? What is PCI compliance? What is your PCI compliance fee, is it built into the monthly fees?
Unfortunately, there is no “perfect” payment solution. There are risks and costs associated with all of them. The best thing to do is educate yourself and make the best decisions for your business. Don’t know where to start? Contact us to get started.
* https://www.cnbc.com/select/credit-card-usage-coronavirus/
