According to the Economic Times, consumers spent around Rs 6 lakh crore using credit cards in 2018-19 which is 30% more than a year ago. This shows that people are widely using credit cards besides debit cards.
If you have a small business, the cost to accept credit card payment can be a little high. But it can help you to scale your revenue. It can increase your customer base, build credibility and boost sales volume.
It is very simple to accept credit card payment for small businesses. There is a registration and setup process but it is not as complex as you think.
Advantage of accepting credit card payments for small business:
- Builds credibility among consumers: When the logos of the credit card are displayed on the website, it gives a sense of credibility to the customers and legitimizes your business. This will build a rapport and trust of your business among customers.
- Eliminates the risk of security: With increasing online frauds, it is important to maintain the security level to prevent such activities. Credit cards have security features that provide peace of mind against online data breaches.
- Boost Sales: Providing your customers with more payment options pleases them and gives good customer experience. It broadens your customer base and attracts potential customers and thereby helps in increasing your sales.
- Encourages buying: Other forms of online payment might limit the expenditure of customers. But credit card payments can encourage impulsive buyers to make a purchase. Customers tend to spend more using a credit card.
- Saves time: To accept credit card payments, you need a payment gateway that comes up with many features. One of the time-saving features is invoice generation. It generates invoice copy without having to generate it manually which can be shared with the customer via email, SMS and social media.
- Eases reporting and reconciliation: Since all credit card payments are processed on one interface, reporting and reconciliation become very easy.
- Makes you competitive: If your competitors are already accepting credit card payments, you might lag behind your competitors. To survive in this cut-throat competition it is important to level up your game and start accepting credit card payments.
How to accept credit card payments online
If you want to accept credit card payments online, you can do it by setting up an online payment gateway on your website or app.
An online payment gateway connects your E-commerce store and your merchant account. It facilitates the processing of the payment transaction between your bank and the card issuer’s bank.
A payment gateway is basically a digital POS Credit card processor using which customers can pay online and a merchant can accept the credit card payments. The customer chooses the credit card payment option, enters the credit card details and makes the payment.
Credit card transaction fees for small business
To accept credit card payment you need to pay a certain amount of transaction rates to the payment gateway. The transaction rates might differ based on the payment gateway you choose. Apart from that, some payment gateways might charge a setup fee, annual maintenance, and integration fees. Generally, the transaction rates are 2% per transaction plus GST.
Accepting credit card payments can boost your sales and increase revenue. Here are the steps you need to take to accept credit card payments:
- Research for payment gateways
- Understand the fee structure
- Set up a merchant account
Once you are done with the above steps, you can start accepting credit card payments and scale your business to new heights.