CUSTOM CREDIT CARD PROCESSING - Services - Internet, PC and Terminal Processing, Wireless

Back to Articles

Making the Right Card Choices

Before deciding to add more cards to its credit card acceptance offering, a business should take a close look at its operation, its customers and the cards under consideration.

Research your customers - Do they ask to pay with cards you don't accept? Do they ever back out of transactions because they can't use a certain card? Do they carry multiple cards? Pay attention to these behaviors and keep data on your customers.

Examine your business - How much credit card business am I doing? Would increasing that part of the business increase sales? Is there enough customer demand for a particular card to justify accepting it? Entitlements should fit with your business goals as much as they fit with the customer's desires.

A Question of Credit: Should I Accept Other Types of Credit Cards?

There is no doubt that credit card acceptance is key to any business. Giving customers flexible payment options has always been a primary concern for business. But as credit card usage continues to rise in the United States, the acceptance of select cards may not be enough.

Consumers are entering the market with more buying power than ever. On average, the typical cardholder now has 10 cards in his or her wallet. The phenomenon is known as "wallet-saturation," and the best way for businesses to tap into it is to expand their credit card acceptance offering to include as many payment methods as their business can sustain. Widening acceptance properly can result in increased sales and the bigger ticket returns that come with credit card usage.

In 1999, credit-based payment accounted for over 31 percent of the dollar volume of all payments in the United States. By 2005, it is expected to be above 50 percent and rising. Meanwhile, credit card issuers are identifying and targeting entirely new segments and sub-segments of the consumer population, extending credit to record numbers of cardholders. According to numbers from Raymond James & Associates, the traditional market for credit cards is 70 percent of the adult population, with 61 percent of that group holding a credit card. Expectations are that this number will increase to 82.5 percent by 2005.

A Competitive Landscape

While Visa and MasterCard cards still dominate the credit card market, established players like American Express/Optima and Diners' Club/Carte Blanche as well as younger companies like Discover/NOVUS and JCB, International are making plays on the growing card market. Customers might once have shrugged off the inability to use a certain card in a store and used another form of payment, but the range of purchase options available in other stores or via the Internet now gives some customers pause. This is especially true if they hold cards with attached incentives such as frequent flyer programs.

Not all cards are right for businesses looking to add additional card types to their credit card acceptance. The decision to add entitlements should be backed with research on customers and their payment habits in the store, online and/or in competitive stores. For more information about accepting additional card types, call Custom Credit Card Processing at 703-739-2224 or email us at info@customcreditcardprocessing.com.

< Back to Other Articles