Recently, a friend travelled to Europe. She brought her credit card with the expectation of putting all of her purchases on it so she could keep track of everything in one place and not have to carry around cash. It makes financial sense to do that (as long as she pays off her credit card when she gets home, of course).
But she was surprised to discover that many stores do not accept credit cards. That is simply NOT the case in North America where almost every business has a credit card machine.
If businesses in Europe don't need to accept credit cards, should we accept credit cards here? There are a few reasons why European businesses don't accept credit cards that don’t necessarily apply to North America: First, Europe is made up of many small nations and it is only relatively recently that a few strong credit card brands have come to the forefront and offer real-time payment approval information. Second, some of the stores have been around for decades – or even hundreds of years! – and have survived this long on a cash-only policy. Third, European ideas of credit are different from North American ideas of credit (although Europeans are slowly adopting a North American attitude toward credit).
On the other hand, North American businesses accept credit because it allows for fast, easy payment without handling a lot of cash. Some small businesses will counter with the following objections: Accepting a credit card comes at a cost: There is a fee charged every time a customer uses a credit card. And, businesses run the risk of receiving "charge backs" when a customer contacts their credit card company and claims to have not received the goods for which they have been charged. There is a third risk in situations where businesses who charge ongoing payments to a credit card may find that the credit card is maxed out.
Although there are costs, the alternative is cash only. Cash only seems like a great idea because it carries no fees. However, a cash only ("European") policy comes with its own price: It's easier to steal cash; it's easier to lose cash; it's easier to counterfeit cash; and fewer customers carry cash with them when they shop.
So, should your business accept credit cards? The answer is: It's probably worth the cost.
Ranger Financial Services
214-206-8060
Find Ranger at the following
http://www.rangerfinancialservices.com
http://www.rangerfinancialservices.info