credit cards are convenient and extremely portitable. What are there draw backs using them as a form payment in your own business?
2006-09-17 14:21:25 · 7 answers · asked by Anonymous in Business & Finance ➔ Small Business
Credit cards are the safest form of payment. As long as the merchant correctly authorizes the sale and follows the merchant bank's contract, you will always be paid. However, there is cost associated with this risk-free, convenient mode of payment and that is you will have to pay your bank a fee. It can range from 2% on up depending on how automated you set it up. A voice authorization would cost the highest rate; fully automated data capture and transmission would be the least, but the terminal cost more. Check around with major banks in your area and they'll give you their options.
2006-09-17 14:30:51 · answer #1 · answered by Anonymous · 0⤊ 0⤋
First of all, there is a cost to accepting credit cards. You will pay about 3-4% of each sale in discount fees an other fees. In addition, of course there is always the risk of fraud, but that is not something too worrisome.
Credit and debit cards are a way of life for consumers and becoming a lot more prevalent form of payment for small business.
2006-09-17 14:29:48 · answer #2 · answered by united9198 7 · 0⤊ 0⤋
You pay the card company a percentage of your sale. The cardholder can dispute the charge .. be able to document the sale to prove you did provide the goods or service. You can get ripped off if there is a fraudulent charge.. On the other hand millions of businesses use them...follow the rules if you ecide to do this and you should be ok.
...by the way if you do decide to do this DON'T sign up with a company that signs you to a long term contract ..this is a big scam... talk to your own bank about setting this up for you..
2006-09-17 15:08:36 · answer #3 · answered by MeInUSA 5 · 0⤊ 0⤋
the cost the credit companies or processing companies charge you to accept those forms of payment.
Usually processing companies charge you a percentage of each charge or a transaction fee basis on quantity. If your profit margin is not large enough to cover these costs it will be an added operating expense you might not be prepared for.
Also if the card is stolen or overlimit, you have no way of recouping the sale amount. The transaction just will not process.
And you have to continually reprocess the transaction, racking up more fees until it goes through and there is no guarentee that it will ever go through.
2006-09-17 14:32:16 · answer #4 · answered by roaddogs_squeeze 2 · 0⤊ 0⤋
1. Depending on the terms of your credit card vendor, you might end up paying up to 6% of each transaction in fees.
2. Depending... you might have a monthly service charge.
3. Depending... you might not see that money for 2 weeks or more. That last one is the killer, since most businesses "go broke" from cash flow problems (run out of cash but are owed money).
Obviously, most businesses accept credit cards, so the reward is obviously worth the risk for the vast majority of people.
2006-09-17 14:30:41 · answer #5 · answered by geek49203 6 · 0⤊ 0⤋
You may not get paid. You need to read the contract between you and the credit card company carefully. You are responsible for a number of matters, including fraud and faulty goods.
2006-09-17 14:29:24 · answer #6 · answered by Anonymous · 0⤊ 0⤋
you pay the bank that you sign up at percentage of every transaction, which is expensive...............
2006-09-17 17:10:20 · answer #7 · answered by churchonthewayseniors 6 · 0⤊ 0⤋