Small businesses are finding that more and more of their customers are shopping with debit cards and in many cases replaces cash; particularly with larger purchases. This can be a problem for many smaller businesses. However there are ways around this for some of the smaller businesses.
Debit cards can be a very useful thing for shop keepers not simply because some customers are no longer used to carrying around a large amount of cash, but also because this will mean that people are more likely to both buy extra items and to buy larger quantities of the goods that were going to be bought so that the customer can get a discount.
It is often the case that smaller shops, service providers and market stalls do not accept debit cards and run on a “cash only” basis. This is particularly the case for small companies that do not operate on the internet.
On the internet there is often a way of accepting credit cards through the use of PayPal. PayPal in most cases will allow an online business to accept credit cards and debit cards through simply having a PayPal account. However this is not an option for offline businesses that deal with people face to face.
There are two major things that an offline business needs when accepting debit cards or credit cards. These are merchant accounts and credit card terminals.
The merchant accounts are accounts that allow a person to accept a credit card and will credit card payments to the shop keeper’s bank account. Almost all banks that offer business accounts will offer merchant accounts. This can usually be arranged through phoning up the business account manager or help desk. There are usually extra charges for this, partly through a monthly fee and partly through merchant charges.
Merchant charges are when a credit card transaction has a proportion of the transaction charged in order to process the transaction. This is usually 1% to 2% of the transaction cost. This can be quite a big issue for shops and service providers that operate on a low profit margin.
Another issue is to get credit card terminals. Mostly these credit card terminals are rented from a bank. These credit card terminals used to be very expensive although now it is becoming the case that there are terminal programs that fit in with smart phones such as Android or the iPhone.
