Excerpt from Retailers Guide to Merchant Services



Here is an excerpt from my book, Retailer’s Guide to Merchant Services.  The numbers after the words indicate where I have placed a footnote in the original copy.

“New and Loyal Customers

The ones who pay in cash now, will probably continue

paying in cash. But now, you will gain new customers

who prefer to pay in credit card.   Most customers

prefer4 to have a choice in payment methods and studies

have shown that you will retain your customers when

they have a choice. Safe Transactions for the Customer

Credit card terminals also accept debit cards which are a

safer transaction for the consumer. Debit cards require

the use of a PIN number which only the owner of the

debit card has. In order to use the debit card, the owner

must enter his PIN number into the machine.

The business owner incurs a charge for the debit card

which is below the rate for the lowest priced credit card,

the qualified VISA or Master Card. The savings in

processing debit cards is around sixty percent. This

means that the fee to process debit cards is about sixty

percent lower than the qualified rate.

In order to process the debit cards, the owner must

purchase a PIN pad in which the consumer enters

his/her PIN number. If the owner does not purchase a

PIN pad or ask the consumer to enter his/her PIN

number, then the fee for the transaction is at the check

card rate which is a about double the rate for processing

a debit card. Because of the savings involved, some

business owners choose only to process debit cards.

Debit cards5 have become very popular as many people

carry them in lieu of cash. When people use the debit

card, they have the option of receiving cash back from


the purchase. This means they can receive an amount

over and above the amount of change they would

receive from the transaction. The maximum amount is

determined by the owner.

Receiving cash back is another very attractive benefit

for the consumer to use his debit card instead of a credit

card as he would not be able to receive cash back from

a credit card. Now the customer has a choice of using

cash, check, credit card or debit card.

Rejecting Customers

What do you gain by turning down a customer? Studies

have shown that a customer is more likely to recount6 a

bad experience rather than a good one. When he relates

the experience, people tend to believe the story teller

and boycott the place rather than investigate on their

own. You may still continue doing business, but your

business will not grow as much as it would have, if you

were accepting credit cards.

Consumer Responsibility

Some business owners do not believe in credit cards for

the social reasons of how customers misuse them. While

this may be a valid point, most people are responsible in

handling their credit cards. We are living in the “Age of

Plastic” and people are able to purchase things that they

normally would not purchase because they possess a

credit card.7

Credit cards make it possible for people to have

businesses and make more profits than they normally

would have if they did not accept credit cards. When

the merchant accepts the payment by credit cards, he

receives cash in his business checking account within

three to five days. As long as the credit card machine

accepts the credit card, the merchant is guaranteed to


receive the money.

People are responsible for their own credit cards and

how they use them. Your decision to accept credit

cards will not contribute to the customer’s lack of

responsibility in controlling his expenses. This is an

issue that the customer must address. It is not the

business owner’s responsibility to ensure that the

customer does not over spend or abuse his credit card



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