And it is that every day the number of consumers who use the debit or credit cards for their purchases for the benefits that this represents. So today I share this guide with you so you can accept cards in your business.
Credit cards, also called plastic money or electronic money, have the following advantages for your company:
- Increase your sales since they open to your customers the possibilities for new and modern means of payment. It is estimated that the receive credit cards it can increase your sales by up to 30%.
- In addition, they are also attractive to customers for the comfort and safety they represent as they help to reduce cash handling (also important advantage for your business).
- Mercadologically speaking, the credit card can increase your billing because psychologically makes shopping easier on impulse. It transmits to the consumer a sense of ease of purchase and above all of “immediate purchase”. And of course, because it is a means authorized in seconds, it prevents the client from canceling the transaction once it has been made.
- The credit is offered directly by a bank or card issuing company With what you do not have to use your own capital so that your client receives the benefit. This of course also means that you do not have any risk in the transaction because it is not your money that is at stake since the client is responsible to the issuer from the moment the credit was granted through the possession of a card.
- Another advantage is that authorization systems allow you to accept cards 24 hours a day with total security, which expands your operating possibilities.
As for the steps you need to enable a credit card authorization system in your company or business, you should know the following:
- Generally, these issuing companies provide you with all the necessary infrastructure to be able to operate transactions such as: POS (point of sale terminal), electronic connections, stationery, instructions, access lines for technical support and authorization system.
- You do not have to make practically any investment to be able to start offering this advantage to your customers since the issuers provide you with everything you need, including training.
- They also usually provide you with POP (advertising) material so you can identify your business and publicize the acceptance of types of credit cards what you drive. This is very important so that your client can know immediately that he has that payment option at the time of consume in your business.
As for the specific requirements to join a bank or issuing company, they are the following:
- You must have a legally constituted company or business.
- You must affiliate with a banking institution or card issuing company. You can request information from an account executive to advise you.
- You must have a checking account to which the funds of the purchases made by your customers will be credited. This regularly in weekly periods or as established by the policies of the issuing institution.
- Fill out a service request and sign the corresponding contract.
- Have a direct telephone line for the operation of the authorization system through the electronic terminal.
- You must inform yourself correctly about the policies of use of the terminals since in most cases it may have no cost over a certain number of monthly transactions or a commission if your transactions do not reach the established minimum.
- Additionally, if you business is small You can request that instead of an electronic terminal they provide you with a manual or porter system that allows you to receive the cards and operate the authorizations by telephone. This takes a bit longer for your client but it still allows you to accept the cards without inconvenience and without additional charges.
What you need to know about the operation
Accept credit cards Once you have the necessary infrastructure, it is relatively simple and these are the steps:
- The customer asks you to buy a product or service at your store with a credit or debit card
- You ask for his card which you can accept as long as it is in perfect physical condition: neither broken, nor abused, nor cut nor altered
- You must make sure that it is the type of card that you are authorized to accept: VISA, MASTER CARD, AMERICAN EXPRESS, etc.
- Some issuers require you to ask the customer for additional identification that matches the name on the plastic
- You must verify that the card is not expired by checking the expiration date. This is usually done by the issuer in the authorization process but it is convenient that you also verify it
- If this is in order, you proceed to pass it through the electronic terminal (POS)
- The POS is a small computer that takes the customer’s data registered on the card, sends them by telephone to the issuer and returns with an AUTHORIZATION
- This authorization represents that the credit has been approved by the bank issuer with whom the customer has a contract. The credit management is then on the bank’s account.
- The other option could be for the transaction to be DENIED. This may occur because the client reached his maximum authorized credit limit or due to any anomaly with his account or his data, which must be sent to the issuing bank to resolve it. In this case, the purchase is canceled and you proceed to request either another card or another means of payment.
- If the transaction is authorized, the terminal prints a voucher that the customer must sign exactly as it appears on his card.
- You give a copy of it to the client and keep the other. This copy of the voucher is your proof of claim for the transactions that the issuing bank must pay you, after deducting its commission percentage.
- Once the transaction is authorized and signed, then you can confidently proceed to invoice and deliver the purchased product to the customer.
- Subsequently and according to the procedures established with the card issuer, you proceed to make a settlement or claim of your transactions with the bank and receive the amount corresponding to your sales.
Finally, a couple of important tips for avoid fraudulent credit card transactions which are also much more common than you can imagine but with the minimum measures and precautions you can avoid them without problem:
- Do not accept plastic cards that are not physically in perfect condition or that inspire you with any doubt or mistrust. Better an angry customer than a loss due to deception or fraud.
- Always check that the signature matches.
- Do not accept cards from suspicious customers that do not have identification or that show nervousness in the transaction
- Avoid confusion and do not accept vouchers that have not been printed within your premises or office
- If you notice any alteration in the magnetic strip or of any other kind, deny the transaction arguing “problems with your telephone line” or with “the suspended issuer” or any other argument that avoids putting your person at risk.
- Train your staff properly so you know all the important details about the acceptance and denial of plastics and fraudulent transactions.
As a final comment, you should consider that of course, the implementation of this kind of services entails a cost that translates into a commission percentage for the card issuer that provides you with the infrastructure and that is who bears the main financial risk. This commission usually rounds between 3% and 8% and is usually the reason why some small entrepreneurs they refuse to use this service because they have the perception that their profit margin is reduced to a minimum.
However, it is convenient that you consider this commission within your costs in such a way that the formula in the end is to earn a little less but obtain an advantage in the sales volume promoted by the acceptance of electronic media in your business. You can even (optionally) transfer this cost to the client under the premise of accepting their cards as a means of payment. And in most cases the client has no objection because he gains the benefit of credit and the facilities to pay.
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