Many companies nowadays accept debit cards as a way of transacting business. Under this method, a client uses the debit card that has been linked to his savings account to pay for goods and services. Credit cards are a reliable method of payment for any fiscal transaction and enhanced convenient shopping. Most businesses accept the use of credit cards to supplement other payment options including the use of credit cards, cash or check. Most of these cards are issued by banks and other financial institutions and are currently in use globally.
Facts about debit cards
Payment using debit cards is similar to the use of credit card transactions. For purposes of convenience, firms have to set aside a separate unit for swiping the cards and approval of the transactions. Credit cards processing companies are charged with the provision of these standalone units which are essential for above stated functions. Businesses are able to access the debit card users’ information and do bank transfers from the client’s account, courtesy of the computerized networks provided by the processing companies.
Approvals are done faster
The approval time for transactions made through the use of debit cards are faster as compared to other forms of payment such as checks and the use of credit cards. This is one of the greatest advantage of using debit cards for business transaction. The whole process includes the pinging of the card to the customer’s account to verify the availability of sufficient funds to cater for the payment of the goods and services rendered. The business has to wait for a maximum of two business days for the money to be transferred to their accounts.
Transactions can be done over the website
The use of debit cards provides businesses with an option of conducting their businesses via the website. This is very advantageous as it allows customers from all over the globe to buy your products thus expanding your customer base. The process of purchasing using the debit cards is similar to that of making physical purchases using debit cards. Most of the credit card processors allow the use of debit cards to make transactions via the website.
Charging of unstable debit fees
There are a number of things that are charged on every use of debit cards including, debit card processing equipment rental fees, charges for tracking issues related to the debit card, otherwise known as support fees, individual transaction charges and other charges depending on the credit card processor. The disadvantage here is that these fees keeps on increasing with every purchase of goods and services by use of debit cards.
Problems with account reconciliation
Businesses are faced with the problem of reconciling accounts given the long process involved. This is worsened by the fact that credit card processors send different statements to the firms for them to review as a way of cash management. The process involves the comparison of these statements with the bank accounts to note differences if any. Businessmen with little financial knowledge may find this unfavorable, compelling them to hire professionals, an issue that leads to increased expenditure and time spent on business administrative roles.
Business.gov: Accepting Credit Cards vs. Debit Cards
Entrepreneur: Accepting Debit Cards
Business.gov: Credit and Debit Cards: To Accept or Not to Accept
Business.gov: Accepting Credit Cards and Debit Cards
The New York Times: Debit Fee Cut Is a Rare Loss for Big Banks; Biyamin Appelbaum; 2010
Business: Guide to Merchant Accounts