Top Reasons For Businesses To Accept Credit Cards

1. Increased Sales.
One of the biggest and best benefits of accepting credit cards in your business is the fact that it can increase your overall sales. The reason why it can increase your overall sales is because it can give you access to a whole new demographic that loves to use their credit cards for their transactions. You will inevitably lose a lot of sales if you only offer cash as a form of payment because a lot of people either do not carry enough cash on their person or they simply prefer to pay with their credit cards.


2. Compete With Your Competition.

If you do not accept credit cards and your competition does, you are going to lose customers to them eventually. As noted previously, the amount of market share of customers that pay with cash is dwindling. Therefore, it is important to adapt in order to be able to survive. If your competition is offering the ability for customers to pay with credit cards, you need to do so as well.


3. Improve Your Cash Flow.

A lot of businesses live and die off of their cash flow. Believe it or not, but accepting credit cards can improve your cash flow. This is especially true if you accept a lot of checks. Instead of having to wait for checks to clear, you will be able to access your funds a lot faster.


4. E Commerce.

By accepting credit cards you will be able to increase your market potential by offering your goods and/or services online. The fact is, credit cards are the most commonly used payment tool for consumers that shop online. If you are planning on getting into E-commerce, you simply cannot afford to not accept plastic.


5. Safer.

Another huge reason to begin accepting credit cards as a form of payment is that it is a lot safer to do so than to accept other forms like checks. With checks, you risk the possibility of it bouncing. That means you will have to spend a lot of extra time tracking down the customer whose check bounced in order to get them to repay. Instead of having to deal with all of that, you simply can accept credit cards as payments. Because they are screened as they are processed, they can ultimately reduce the amount of risk that you inherit for fraud. Also, reputable merchant processors are going to be able to ensure that your processing is safe and secure. They will also be able to protect you and your customers from all kinds of problems like data breaches and/or identify theft.


6. Convenience.

Another huge reason to accept credit cards as a form of payment is that a lot of customers find them to be convenient. Otherwise, they have to carry a lot of cash on them. This is not as safe for them to do. Therefore, you might miss out on a sale simply because the customer only shops with credit card(s).


7. Inexpensive.

A lot of small and medium sized businesses that do not accept credit cards as a form of payment note that they do so because it is expensive and that it eats into their profits. The truth is, it is not very expensive at all. Because the processing industry is so competitive today, you can find credit card processing packages at extremely good rates. Take Higher Standards for instance, they offer some of the most competitive rates in the industry.


8. Quick And Easy To Do.

Another benefit is that it is incredibly easy and quick to do in today’s marketplace. Gone are the days of having the process take weeks. You can now get your account set up within days.


9. Legitimize Your Business.

Because most consumers recognize and trust brands like; Visa, MasterCard, American Express, etc, you will be able to legitimize your business by leveraging their reputations. This means that you will be able to sell to more customers as a result.


10. Business Credit Cards.

It allows other businesses and/or wholesalers to purchase from your business with their business credit card accounts.
As you can see, there are plenty of benefits that you get from accepting credit cards as a payment. If you want more information, you can contact Higher Standards for all of your credit card processing needs.

The Rise of B2B Credit Card Payments

Business owners, especially those who operate in the B2B space, are under a lot of pressure to accept credit cards. For the companies that they deal with, credit cards are the ideal way to manage employee expenses. Instead of having to keep detailed track of the transactions that they carry out, and hand in massive numbers of receipts at the end of each month for transactions handled with a mixture of cash, bank transfers and debit cards, it makes sense for companies to give senior employees a credit card and then allow them to use that as an ongoing account for day-to-day expenses.
Credit cards are ideal for B2B transactions, because Level 2 and 3 credit card transactions are carefully checked before authorization, and they include plenty of information about each transaction. This means that company account managers can confirm the details of each transaction in-depth, preventing employee fraud.
Cash is Too Difficult to Track.
According to The Credit Examiner, cash point of sale transactions account for just 27% of transactions today (this is including general consumer shopping) and they are expected to fall to account for just 23% of transactions by 2017. Cash is inconvenient, slow, and also has a psychological barrier to it that prevents spending. It’s much easier to say “Oh, it’s $20, I’ll expense it!” than it is to pull out one of the few remaining $20 bills in your wallet and hand it over.
Travel expenses account for 81% of credit card spending, and this is easy to understand – a lot of car rental and hotel companies will place a temporary hold on a credit card for potential damages, releasing the hold when the car is returned or the visitor checks out. Businesses provide their employees with cards for just that purpose.

The Cost of Processing Card Transactions

Many smaller B2B businesses are still reluctant to accept credit cards because of the perceived expense. While it’s true that processing consumer credit card transactions can be expensive, the fees for Level 2 and Level 3 transactions are lower. So why is it that, according to the Association for Financial Professionals’ electronic payments survey, only 50% of B2B companies were accepting credit cards for payments of any size as recently as 2007, and that number fell to 30% for big-ticket transactions? Well, the answer is partly in the margins.
What many companies don’t realize is that the cost of processing credit card transactions reduces as the level of verification required for the transaction increases. Yes, the margins on smaller cardholder not present transactions such as consumer catalogue purchases are thin, but for big-ticket B2B transactions where the address of the cardholder is verified and there are other processing precautions in place, the cost is lower. If you have a steady stream of customers and you promote credit cards as a payment method then you could save a lot of money doing this.

Taking Payments By Card is Easy

Business owners get a lot of benefit from using credit cards – including interest free revolving balances, easy transaction tracking and the insurance associated with the card itself. In the current, crowded marketplace you cannot afford to refuse to accept credit cards for business transactions. If you aren’t sure where to start with accepting B2B credit card payments, consider talking to an advisor from Higher Standards. This credit card payment processor will be happy to explain the different classes of transaction and the fee structure, and how you can choose the best payment methods for your business.

What You Need To Know About Level 3 Credit Card Data Processing

All transactions involving credit cards are classified into one of three categories, described as Level 1, Level 2, or Level 3. As these levels increase, the amount of data required to verify the transaction increases. However, the more data that is submitted with a transaction, the lower the rate that is charged for processing it.
For example, most transactions between a business and a consumer are Level 1 transactions. When a customer buys something at a store with a personal card, very little data is required to process the transaction. In most cases, all that is required is the name of the customer, the date, and the amount of the transaction.
Business-to-business transactions are often processed at Level 2. Such transactions require more control to make sure that spending is properly monitored by the business or government agency. By submitting more data with each transaction, the processing is simplified for the client.
Finally, a Level 3 transaction is generally one that is made with a corporate card or a government purchasing card. These cards are generally only used for official purposes and require more involved reporting. In addition to all of the data required for a Level 2 transaction, a Level 3 transaction requires quite a few additional fields to be successfully completed.
For example, such data as the product code for an item, the quantity purchased, the tax rate on the item, the ZIP code where the item was purchased, and other such fields must be completed. By including all of this data with the transaction, it can be processed more quickly and accurately.
The major credit card companies, such as MasterCard and VISA, will charge lower processing fees for Level 3 transactions that include all of the required data fields. In many cases, such fees will be reduced by anywhere from 0.5 percent to 1.00 percent, as long as the data is accurate.
Large corporations and other organizations can gain many benefits from tracking this additional data. Businesses can more closely monitor any spending made using the corporate credit cards, and they can also make sure that they receive the appropriate information about sales tax. Such data can also be used to enforce any spending restrictions on corporate cards.
The more transaction data that is available, the easier it is for a firm to track its spending and keep any inappropriate or unauthorized spending to a minimum. This helps to keep costs as low as possible and avoid any internal problems with employees using corporate credit cards inappropriately.
It is important to remember that Level 3 processing is intended only for business-to-business transactions, and is unavailable for transactions involving consumers. The transaction data also has to be transmitted via an authorized Level 3 gateway. Standard credit card terminals cannot transmit this information.
Make sure to choose an account provider who has experience working with Level 3 credit card processing. This way, you can make sure that the transaction information is submitted in the proper format to avoid any problems.

What Are Level 3 Credit Card Transactions?

Credit card transactions are divided into three different types for the purposes of processing – level 1, 2 and 3. The types reflect the level of requirements needed before the transaction can be authorized, and depending on the level can be either quite cursory, or incredibly detailed.
The level of the transaction will depend on the types of customer that your business works with, and the cost of processing the transaction will depend on the number of data fields required.
Level 1 credit card transactions are the B2C transactions that most of us do on a daily basis. They can be small or large purchases, but they are quite routine things and they do not need extensive checks. The data required to complete a level 1 transaction is minimal – usually just the customer name, the date of the transaction and the amount.
Level 2 transactions, on the other hand, are bigger B2B transactions. These are transactions carried out through business-specific payment channels, where the ability to monitor and control spending is required. Level 2 processing simplifies the B2B spending process, and provides clients with very accurate transaction reports.
The highest level is Level 3 credit card processing. This requires the most detailed data and as such it has the lowest processing fees. Level 3 credit card processing is usually used by government agencies and by businesses that want to have more control over the spending of card-holding employees.
The amount of data required for Level 3 credit card processing is greater than that for level 2 – it includes product codes, the descriptions of items processed as well as the quantity of each item, the tax rate, freight amount, the postal code it was shipped from and shipped to, the destination country code, the duty amount…..etc. This helps to ensure that any transactions carried out are indeed for the purpose of conducting business.
B2B credit card processing solutions can seem difficult to get started with at first, but if you want to ensure that you enjoy low processing rates and that your clients are happy with your payment processing solutions it is important that you give some thought to the level of transaction handling that you use. There are several payment processors that offer the higher level of payment processing, so it should be easy to find one that will suit your needs.
It is important to offer as many payment options as possible to ensure that you do not lose clients. Every business has their own strict requirements for how expenses must be handled, and the easier you make it for people to work with you, the more likely they are to use your business as one of their main suppliers.

Understanding Level 3 Credit Card Transactions

There are three levels of specific credit card transactions which can occur. There are subtle differences between each level and what it means for both businesses and customers using them. Here is a look at what a level 3 credit card transaction is.

Understanding The Levels

Let’s begin by deciphering the levels and what the structured set up entails. Essentially, level one is a type of credit card transaction with the least amount of verification and/or authorization needed. It is both limited in what the business requires to approve of the credit card and there are less data field required in general.

 

This is why level 1 credit card processing is used for business to consumer transactions. While, level 2 credit card processing is referred to detailed transactions between businesses. The main focus here is level 3 credit card processing and what it entails. Essentially, this processing is used for government agencies and/or other related institutions where credit card processing is being completed. Since, this is a structured set up, level 3 processing includes everything from level 1 and 2 processing as well. Thus, it has the most data fields to complete.

Increased Control

What is the reason for level 3 credit card processing being put in place? The goal is to provide increased control to both parties ensuring the transaction goes through as smoothly as possible. Most credit card transactions being done at this level are going to require some attention to detail and therefore is often going to require more coded data.

 

Control is required to ensure the transaction is not being erroneously punched in and when it is put into the system, it is able to go through without a problem. This is where the increased control comes into action.

Data Fields

This point has been touched upon here, but what type of ‘data fields’ are put in during level 3 credit card processing? What type of information is sought out when doing this procedure?