Business Finance

Why Swipe Fees Are Worth Accepting Credit Card Payments

Oct 10, 2019 • 4 min read
Cashier taking credit card for payment
Table of Contents

      The thought of paying ridiculous credit card fees may have you on the fence about accepting credit card payments at your business. We understand. Your profit margins are already razor-thin—how in the world can you afford an additional expense on every purchase?

      We know it’s hard, but it’s time to come down off the fence and embrace reality. Credit cards are the future, and cash is the past.

      Fees aside, good business involves going the extra mile to ensure a quality customer experience—not penny-pinching. You don’t turn off the furnace in the winter to save a few bucks, nor do you require your customers to take off their shoes so you can avoid mopping and vacuuming. So, why would you hassle your customers to pay with inconvenient methods? 

      All things considered, swipe fees are well worth the price of accepting credit card payments—here’s why.

      1. Not Accepting Credit Cards Has a Price

      The reality is that not accepting credit cards has a cost, as well. A cost of lost customers; a cost of reduced cash flow; a cost of non-compliant payers; a cost of chasing down late-paying customers. You get the picture. 

      Sure, you won’t have to pay the 1.4 – 3.0% processing fee, but is that fee worth your time and customer retention? There are real costs to inhibiting credit card payments—make sure you factor those expenses into your decision making.

      2. Convenience Fees Aren’t Unexpected

      To compensate for the processing fees, build the price of accepting cards into your costs. Don’t want to raise prices? Be clear and up-front about the cost at checkout. If a customer wants to make a purchase using a credit card instead of cash, make it clear that there will be a marginal convenience fee. 

      Most consumers understand that your business pays a fee for them to use their credit card. That, or they’ve just become accustomed to seeing “convenience fee” line items on their receipts. Regardless, customers will respond to a convenience fee better than a refusal to accept their credit card, which could be their only method of payment.

      3. Fewer Consumers Use Checks and Cash

      Open your wallet or purse. How much cash do you have? Any? Only 64% of millennials carry cash with them. What about the other 36% who might want to purchase at your business? What about a checkbook—still carrying one of those around? Doubtful. Only 1 in 5 people still carry a checkbook with them on a daily basis. If these things are true, then why in tarnation wouldn’t you accept credit cards?

      Fewer potential customers are carrying cash and checks with them, and even those who do have made it a habit to swipe their card for everything from a tank of gas to a gallon of milk. Don’t fight your customers—make their purchases at your business as seamless as possible. Not only does this improve the experience for your existing customers, but it opens doors to new clientele.

      Imagine you’re at the farmer’s market and a competitor selling similar products accepts cash only. You accept cash, check, and credit card. By default, you’ll win all the customers who aren’t carrying a checkbook or sufficient cash.

      4. Modern Software Works Well With Credit Cards

      Many credit card processing programs sync with your bookkeeping software, streamlining your accounting. Software like this practically balances your checkbooks for you, and it also automatically imports and categories your expenses. That feature means you can spend less time working after-hours on the ledger and more time relaxing before another busy day.

      5. Diversifying Payment Options Helps You Reach Diverse Customers

      Open up the menu at your favorite restaurant. You’re bound to see a variety of options to choose from, including appetizers, entrees, desserts—you name it. And these choices likely contain tailored selections to match the tastes and preferences of a wide variety of customers. Vegan, vegetarian, gluten-free, low-carb, keto, paleo, Whole30—and probably more!

      All of these various dietary restrictions come with their own individual ingredients and specialized cooking requirements. No, it’s not easy or cheap for restaurants to provide this many different plates, but it’s worth it.

      The same goes for your business’s payment options. Diversifying your payment options allows you to reach diversified customers. Yes, it may require additional costs and inconveniences, but it’ll be well worth it in the end.

      No business owner likes paying credit card fees, but the swipe fees are well worth the benefits—in the short term and long term. Even now, cash and check payments are becoming increasingly rare. Think ahead 5 or 10 years. Who knows if they’ll even exist? Get your business ahead of the curve and start accepting credit card payments sooner rather than later.

      About the author
      Jesse Sumrak

      Jesse Sumrak is a Social Media Manager for SendGrid, a leading digital communication platform. He's created and managed content for startups, growth-stage companies, and publicly-traded businesses. Jesse has spent almost a decade writing about small business and entrepreneurship topics, having built and sold his own post-apocalyptic fitness bootstrapped startup. When he's not dabbling in digital marketing, you'll find him ultrarunning in the Rocky Mountains of Colorado. Jesse studied Public Relations at Brigham Young University.

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