Credit Card Processing’s Conversation Must Change

The credit card processing world has now been around for ages. Accepting credit cards has become commonplace at most businesses and has changed significantly over the past twenty years.

Business owners went from calling in transactions for authorization and knucklebusters to dial-up terminals to POS systems and Virtual Terminals.

In the past, a credit card processor’s sales force soliciting merchants spoke primarily on promising to save them money on their fees. These days, the conversation typically is focused around reducing credit card processing rates and fees.

Wait. What?

Credit Card Processing Sale

Yes, this element of the credit card processing industry remains the same.

Unfortunately, just as many credit card processing company’s sales agents want to talk about rates, so do small business owners.

If I would walk into 100 small to medium size businesses today, 97 of them would only want to talk about what is the rate. (For the general consumer, it is important to know that each business does pay a percentage of each transaction. The percentage varies depending on what type of card is being used for the payment. For further explanation, see How Credit Card Processing Works Explained using Milk.)

This is true, because a few weeks ago, I decided to go out in the field as a sales agent. I revisited selling merchant services acting as if I were relatively new to selling payment processing. Now maybe I would need to meet more than 100 businesses for a better overall picture. However, rates are the main driving factor in credit card processing conversations.

We’re Going to Secure Transactions like it’s 1999?

Whenever speaking with our True Merchant payment consultants and business owners, I frequently use the phrase, “This is 2016, not 1999 so security matters.”

Back in 1999, data breaches were rarely happening, especially compared to the rate they are occurring at now.

Not PCI Compliant

Data breaches do not only happen to large companies like Target and Home Depot, they also take place at small businesses throughout America. And unfortunately, when a data breach occurs at a small business, the business rarely has the backing capital to successfully survive such a catastrophe. According to First Data, the average data breach costs a small business in excess of $36,000.

Data breaches are not only painful for businesses, but also leave a bad taste with consumers. Customers dealing with the hassle of updating payment information is typically not how a company wants to brand its business. First Data’s statistics show that 31% of customers terminate their relationship with the merchant after a breach.

Now don’t get me wrong, having affordable, competitive rates for accepting credit cards is important. However, this only should be part of the equation, not everything.

There are too many businesses who would rather go with an unsecure solution that costs them pennies less per month in credit card processing fees than go with a provider that will set them up with EMV and point-to-point encryption. Again, this mindset does not apply to every business, but it is frightening how many do think this way.

My proposed solution: It is time the public ask their small businesses which they patron, “Is my payment safe here?”

Consumers need to start the dialogue to help create the demand. The end user is who usually drives change in most industries. Upgrading to securer credit card terminals, POS Systems, and gateways really does not cost much money. Most credit card processing companies are reasonable in working to help merchants achieve a higher level of security. Secure credit card processing is truly a win-win-win for consumers, businesses, and independent sales organizations and processors.

Of course, for any business owners and corporate officers reading this, I recommend you having the conversation with whomever you trust with your payment processing.

 

True Merchant offers both EMV and Point-to-Point encryption to merchants of all sizes and does not charge more for these security features.

If you have further questions or know of a business that needs help with upgrading to accept credit cards in a secure manner, please reach out to us at True Merchant.

About

Vice President of True Merchant.
Really Nice Guy.