The Great Credit Card Conundrum
We rely on credit cards and other cashless forms of payment as business owners and consumers. As a result, we roll points, cash-back schemes and fee schedules into decisions about what we use and what we accept. We have our thoughts, but what are yours?
Here are ours.
We’re seeing more fees as a business and as a consumer. As a business, we can absorb fees on small amounts, but for large amounts, the fees are too large. In one recent month, we collected $4,300 in credit card sales and paid almost $67 in fees. We realize there’s a convenience factor that makes sense for us to pay the fees. We don’t have to spend time (which has a cost) to stamp checks and then use a mobile banking app to deposit each check. We can take the stamped checks to the bank, but that’s travel time. If you have a business, what role do fees play in your decision about whether to take a credit card?
Of course, if you have a business with walk-in traffic, you can get a break on fees. But that only works up to a point. For example, if you buy a car for $35,000, it would be nice to pay with your credit card and earn points or cash back. But if you’re the car dealer, you’ll absorb fees in the neighborhood of $1,000. Neither party in that deal benefits; only the bank benefits. How do you navigate this as a consumer or business?
Many nonprofits ask you to absorb the fee when you make a donation. Do you check the box to pay the fee?
In your business, do you prefer an alternative to credit cards, such as an ACH or a check? One benefit of taking a credit card is that can streamline your accounting system.
As a consumer, do you sometimes balk at putting your credit card number on the internet when you buy online or over the phone? If you’re afraid of having your credit card info exposed to hacking by entering your card on a website or giving it out by phone, you should know that a transaction in a store or office involves using the internet, and someone in that chain can be hacked.
You should also know that anyone who takes your credit card number by phone is NOT allowed to write down the full card number. They should be entering it on another website that will display only your last four numbers once it’s verified.
We are seeing one advance in using credit cards – or their numbers – in restaurants. We’ve never liked the fact that servers take your card to a location you can’t see to enter your card info. That disappearing act is the most serious threat to your card’s security. Having your server process your card at your table is better, but then your server is standing over you while you decide on the tip. That’s uncomfortable.
A better solution involves the use of your phone. When your server presents your bill electronically, there’s also a QR code you can scan. That puts it all on your phone. If you are set up to pay through your phone, you can add the tip and pay the bill without ever pulling out your physical wallet.
As we move farther into a cashless society, we can help you – as a business or consumer – to set up your technology to be more efficient and secure. And we can answer any questions you may have about how to use what you already have. Give us a call – 973-433-6676 – or email us.