What Does Not Having a Merchant Account Cost?

There are a number of online business owners who have taken a casual look at adding credit card processing services to their sites, seen that there will be monthly fees and charges and stopped looking at that point. Why give the credit card companies their hard-earned money, they reason.

One good answer is that they are likely costing themselves money instead of saving money. As more people start shopping online and using their credit card, and more sites add merchant services, the public expectation that all sites accept credit cards will rise commensurately.

There is already proof that many online shoppers consider a site that does not have a merchant account option to be less than trustworthy, which is one more reason to have the ability to accept payments online.

So those online business people are actually breeding ill-will with today’s ‘net shopper, which is going to cost them far more money than they are saving by not having credit card services. But other factors come into play as well.

Some people like the speed and convenience of being able to pay with their credit card, so they aren’t going to patronize any site that makes the payment cycle longer.

Others like using their credit card to shop because they are going to be reimbursed for the purchase. Having to pay any other way takes money out of their pocket for a certain amount of time.

Many like using a credit card on more expensive purchases because they want to be able to spread the payments out over several months, an option having to pay another way won’t allow.

And some like the buyer protections that come with paying by credit card – especially since they are ordering merchandise site unseen.

On balance there are people who prefer to pay upfront for anything – whether from a bricks-and-mortar store or a virtual enterprise. They prefer not carrying any debt.

However, more than 80 percent of everything bought online is paid for using a credit card, which means the latter group is not going to generate enough business for an e-store owner to sustain profitability on an ongoing basis.

The good news is that studies have shown that being able to accept credit cards increases sales and profits, and boosts repeat business – meaning those monthly fees that go with merchant services will be more than paid for.

So at the end of the day the wise move for any online business owner that wants to see their site sustain itself, if not grow to the next level, is to invest in great online credit card processing. It is good business and it is what a vast majority of the Internet shopping public wants to find when they fire up their online connection and go shopping, credit card in hand.

The choice is simple. Save a little money and alienate a lot of people. Or spend a little and watch you business take off. Because online shopping is not going to go away and neither will people’s desire to use their credit cards. So do you want to save a few bucks, or do you want to make a lot of shoppers feel welcome on your ecommerce place of business?

Jim Osterman is a Web content developer with Charge.com, a leading merchant account provider that helps businesses find innovative credit card processing solutions.