When you are part of a small offline company, only accepting cash can seem like a safe bet. But it's not the smartest way to grow a business.
That's why we asked nine members of Young Entrepreneur Council (YEC) the following question:
Q. My family's brick-and-mortar business is finally starting to accept credit cards. What's one tip you have for a newbie starting to accept plastic?
1. Negotiate Swipe Rates
Shop around on swipe fees the same way you would a mortgage. The difference between 2.1 percent and 2.3 percent seems small, but you'll be happy to have that free money when you're running millions per year. – John Rood, Next Step Test Preparation
2. Understand Security Risks
When you start accepting credit cards in store, remember that you have a responsibility for maintaining the security of your customers' card details. Be sure to report any suspected fraud or security breaches to your merchant account provider so there are no mishaps and you can always maintain the trust of your shoppers. – Doreen Bloch, Poshly Inc.
3. Know Rates and Negotiate
A lot of small businesses get screwed on transactions costs. Don't listen to one salesperson -- get multiple quotes and make them compete for your business so you have a favorable outcome. Also consider using Square; it's so easy and they have very fair rates. – Carlo Cisco, SELECT
4. Use a Small Business-Oriented Processing Company
Dan Price owns a credit card processing company that has some of the lowest rates around. It's perfect for any small business that's a little more mindful of expenses, but would also like the same level of customer service that the big companies get. Take a look at Gravity Payments. – Andy Karuza, SpotSurvey
5. Know What to Ask For
Full disclosure: I own a merchant services brokerage. Ask the right questions: Is there a contract term (hopefully not)? Is there a set-upfee (hopefully not)? Is there a monthly minimum penalty (hopefully not)? What are ALL of my rates for various transactions (not just debit, but also rewards cards, corporate cards, and card-not-present rates)? Can you set me up with an EMV compatible terminal? – Darrah Brustein, Network Under 40 / Finance Whiz Kids
6. Think About the Future
The payments industry moves at a breakneck pace. Don't just invest in a device that lets you swipe a mag stripe -- think about all the other form factors your customers might use in the next three to five years. For starters, be ready for chip cards and near field communication (NFC) now. – Ben Lyon, Kopo Kopo, Inc.
7. Try LevelUp
Due to bundling, LevelUp offers some of the lowest fees in the industry as well as opportunities to drive remarketing campaigns and customer loyalty rewards. Fees for most other payment processors can eat away at profits, especially due to a number of hidden fees, so try LevelUp. You'll find it refreshing thanks to its transparent (and straightforward) cost structure. – Firas Kittaneh, Amerisleep
8. Check IDs
Always ask customers for their drivers license when they pay via credit card. It will only take a few extra seconds per customer and should significantly reduce fraud. – Josh Weiss, Bluegala
9. Keep Records of Everything
Even if you end up keeping receipts in a big disorganized box (don’t do that), having the records on hand is a must. Too many issues can come out of not practicing proper record keeping. – Daniel Wesley, DebtConsolidation.com
