As we discussed in the first part to this 2-part article series, many consumers nowadays like to purchase things and make payments on products using credit cards, especially when they are shopping online. If you are not currently accepting these payments therefore, you could be missing out on an even larger customer base than you currently have. However, before you make the decision to accept these kinds of payments, it’s important to weigh up the advantages mentioned in the first part against the disadvantages we are going to look at below.
There Are Various Expenses Involved
One of the biggest disadvantages of accepting credit card payments you should be aware of is that there are expenses involved in the form of various charges and fees. These cover everything from monthly statements, interchange and processing to other merchant services. Additionally, you may be expected to pay a small monthly charge and will need to pay the PCI compliance rates too. If your business is only just starting or not yet making enough profit, it may be best to stick to accepting cheques and cash payments until the circumstances improve.
Charge-backs occur when customers pay for services or products and then dispute the charge with their credit card provider. This can still happen after many months have passed since the payment was put through and the transaction completed successfully. In order to keep the customer happy you will have to give them a credit back, which will mean you are charged the same fees you had to pay when you initially accepted the payment, even though you are refunding their money.
Risk Of Fraud
Although there are many laws and security measures in place to reduce fraud and protect the sensitive information of your customers, there is always a risk of fraud when credit card payments are involved. If you want to accept credit card payments, you need to take appropriate measures to protect the privacy and personal information of your customers. Also, when it comes to situations when someone has used a stolen credit card to purchase items from your site, you may be required to compensate the bank involved for the transaction because many banks and issuers hold merchants responsible in these situations.