Credit Card Services Not Cheap For Merchants

In order to attract new consumers to become addicted to credit, many companies are expanding the credit card services they offer, both the consumer as well as the merchants to make using credit cards easier then ever to use and accept. The card industry has grown over the past decade to a point where it is nearly unheard of for even the smallest merchant to not accept credit and debit cards and while the consumer is the apparent winner in card use, those that provide the credit card services are being paid by either the consumer or the merchant.

Most consumers do not realize that every time they swipe their credit card or their debit card, the merchant is charged by the company that is offering the credit card services to the merchant. Charges for these services can range from under one percent of the total transaction amount to as much as two-and-a-half-percent. This amount paid to the credit card services company is added to the merchants' cost of doing business and subsequently to the price of the merchandise.

In addition to the cost of the credit card services, merchants also pay for the use of the equipment used at the point of purchase as well as maintaining the equipment. When a consumer swipes their card and signs the credit agreement, they are agreeing to pay the card company the amount of the charge, which is submitted to them by the credit card services company.

Not All Purchases Eligible For Credit Card Purchase

Many smaller retailers cannot afford to keep their prices down and pay the additional cost charged for using the credit card services. Many calculate their profit on sales and if the percentage charged by the credit card services company bites into the bottom line too much, they may not be willing to accept plastic for the transaction. Others may place a minimum purchase amount before accepting credit or debit cards from the consumer.

Consumers usually have to sign the credit card receipt as a promise to pay the card company, but the use of a personal identification number or some other form of electronic acknowledgment is also accepted by many credit card services companies as a way to insure they receive their payments. If a person finds an unauthorized charge on the credit card and manages to have the amount removed from their balance, the merchant, according to the agreement with many of the credit card services companies, may still be on the hook for the original cost of running the transaction.