In some parts of the world, especially in the usa, people and businesses seem to have an being addicted credit cards. Carrying the card represents purchasing power and comes with the freedom of spending anywhere and anytime. It also comes with the buy now and worry about paying later feature which is most easy for shopaholics. What folks don’t realize is that credit cards, similar to products, just weren’t invented for the joy and the convenience of the spenders. No Mister! These were invented to do what businesses do so well: make money for the card providers and leave the consumers in financial trouble up to their ears. The recent financial crisis is proof that people want to stretch longer than their umbrella can cover them and holder up a debt in order to barely pay the interest on the balance. The creditors are, of course, delighted: they make good money on the interest payments and if someone foreclosures, well, they just pass the balance onto to all of those other card cases and merchants with higher fees.
Since the bill has to be paid, whether you postpone the payment or pay the balance off right away is only the matter of money management. A simple trick is to have a savings account and spend only if there is money in the piggy. This successful for companies as well as individuals, in fact, I know companies that refuse to hire anyone unless they have at least two years worth of salary money in the bank to cover the new employee. So the question remains how to avoid the evil queen of credit card payments in your business? It is surprisingly simple, in fact, in many parts of the world, like in Asia, credit cards are not very welcome. Let us take a look at why people would want to use the plastic. Microsoft Dynamics 365 Business Central Credit Card Processing
Convenience. Granted, this is a major attraction, for online payments. Let us observe how it works: you decide on the product, then the system markets you to the payment page where the card details are entered into an online form. Push the button and voila, the item is purchased. Well, not really. There is the matter of settling the payment that may take a while and may have some complications such as payment sexual rejection, payment revulsion, insufficient funds, etc. If convenience is an issue, you may want to try virtual checks. The process is equivalent to credit card payment: the buyer enters his bank account information into a form, signs the check online and done. You print the check at your end and take it to the bank. No fees may take place at either end and the virtual check capability may cost you as little as $99 a year.
Delayed payment. There is nothing that the creditors can offer to card cases that you cannot top. Your client wants delayed payment, fine, that is the way it works: provide a simple payment plan. It may even be a no interest payment with just a small administrator cost that covers some data processing and emailing the monthly expenses. This would only work for products that are costly and can be resold to other customers in case there is a default on the payment.
Rewards. The creditors like to hang the honey covered stringed in front of your eyes by offering reward points. Earn 1, 000 points and we get you $100 off your next purchase. You can top this easily: provide a 10% discount on full payment, or a 5% discount on payment in two installments. Take advantage the pocket now is preferable to some reward later on.
Credit limit. Each credit card comes, of course, with a loan; the higher the limit the more dangerous it is. This is easily usual. My grandparents never had hardly any money, they had a loan at the grocer, at the butcher shop, etc. On payday they paid what they to be paid to everyone the merchants. As a business you can set up a loan to your customers, based on many factors such as how long have you known them, what is their purchasing history, what kind of business they are in, etc. Based on this data you offer services and products along with an decided payment plan.
Investments. Many companies use their credit cards as a form of getting investment finance. If you owe 20 or so, you may be able to muscle up $200, 000 in capital to be invested into your new or ailing business. So far so good, however, this capital will be used to purchase goods and services the business needs. This is where you come in. You can offer your goods and services free of charge in the form of investments. Yes, it has an element of risk involved, however, investments are all risky. If you made a profit, then there is the question of what to do with it: reinvest it into your business (smart move), buy stocks (bad move), or invest into another business that has potential. Remember, you are not investing your hard earned money your services, a less risky move.
Flexible credit. A number of companies, such as Skype, followed this payment model: deposit a percentage into your account and use it as needed. Once the balance is low, you can stock up again. Now, the credit may not be actual money, but instead points that are worth a percentage in several stock markets. The main benefit of this is that the points may have different dollar or Euro values depending on how the stock markets go up and down.
Cash is still King. If you move a lot you may have pointed out that many nations are not too keen on credit cards. In fact, some countries like Hong Kong, prefer cash over credit cards and when you pay by card, the price is higher. That is, for each product there is a cash price and a charge card price, which is of course higher. The us consumer has no idea that he is being cheated by the merchants. Credit card payments cost the merchant 3-5% of the sticker price, which is naturally calculated into the price. When you pay by cash, the merchant makes an extra 3-5% on your payment. The honest way of performing is the Hong Kong way: you add credit card surcharge just to credit card payment but not to cash payments.
Credit card payments, although may seem convenient, are dangerous instruments. There is not much you receive when use a charge card versus pay by cash or check. Restructuring your business, using our comprehensive ibusiness solutions approach, around less risky payments may be one of the important decisions that needs to be made in the world of global businesses and economic questions.