When using the Internet to buy things, one can save time and money. Not only that, it’s convenient to shop online as a consumer can find exactly what he or she wants, all without leaving the house. Not only that, companies have been able to streamline the process and save money for their clients. With this in mind, many end up charging lower prices. One reason is that it’s much less expensive to accept credit card payments on the Internet. With this in mind, here are three reasons why transactions rates differ for retail and Internet processing.
Without a doubt, when running a retail store, one will need to use a POS system or other setup. While credit card processing is easier with a machine, a store owner will need to spend a lot of money on the infrastructure. Other times, the provider will offer this to the customer, at a cost. For this reason, when accepting payments in person, one will spend more money. On the other hand, with merchant accounts that are online, one won’t need any equipment.
While it sounds scary to accept payments via the Internet, it’s not as bad as it seems. With multiple fraud checks in place, credit card processing online is not scary at all. This is in stark contrast when compared to in-person transactions where one can trick the clerk or otherwise defraud the store. When this happens, everyone loses. Simply put, with so much fraud going on in person, companies charge more to accept payments via this method.
Finally, with the internet, one can find a quick solution to most problems. Think about it, when looking for merchant accounts, people will often hop online and never talk to a person or meet with anyone in person. This is not the case for most in person setups. When meeting in person, one will go over the credit card processing plan and even sit down to discuss equipment and what not. When this happens, the company will have to pay a salesperson to service the business. This all adds up, and this is a huge reason payments in person are costlier.
Without a doubt, when running an online business, one can save money on payments. When doing so, an entrepreneur can cut his or her own costs, which allows them to pass the savings along to current and future shoppers.