Is It Possible For A Merchant To Accept Credit Cards for Free?

Merchants always have to make the choice: to accept credit cards or to accept only cash and debit payments. The reason they face this dilemma is that there are fees charged to merchants for every card transaction; fees they must pass on to customers unless they choose to take a hit to profits. Will anyone accept credit cards for free?

What To Know About Accepting Credit Cards For Free

There is no such thing as free credit. That goes for merchants whether they run physical shops or online retail businesses. If a firm can get away with asking for cash only, perhaps by having an ATM on site, then they might want to stick with this option (especially Dollar Stores and shops selling inexpensive items like coffee, cheap novelties, etc.)

For stores where every purchase is likely to exceed $25 or $50, it makes good business sense to have a card reader on hand to accept major credit cards. Systems are available from banks if you are accepted to set up a merchant account with one. Internet companies also host payment gateways or third-party payment portals to allow companies to accept cards. None of these services are free. There can be some free features, however, and it is worth looking into them.

Some Free Features

When you want to read credit cards, your bank or payment gateway will supply a card reader, software, and technological security. You will open an account on a monthly, yearly, or per/event basis, usually at a fee. Typically, every part of this arrangement costs money, but not always.

Exceptions include:

  • A free reader for signing on
  • Free sign up, no monthly fees
  • Free sign up, no monthly fees, and a free reader
  • Free membership during a trial period
  • A free app for iPhone, iPad, or iPod touch transactions

As you can see, there can be some advantages to choosing one company over another, and there is plenty of competition. Where companies make their money is with the fees per transaction, usually set at a percentage of each payment or a percentage plus a flat rate. Look around and you might find a single, flat rate which is the same no matter whether your customer buys $20 of paper or $100 worth of clothing.

The Costs of Accepting Credit Cards For Free

This is where the real costs start to mount up: on transaction fees. While you cannot reduce these costs to zero by choosing your route carefully, you can keep them low by behaving wisely. Banks typically charge more for setup fees than online third party suppliers. Then again, third-party suppliers might hit customers with higher fees for transactions or monthly payments. The only answer is to research the topic carefully and expect to pay something at some point. For although accepting credit cards for free may sound nice in theory the reality is that nothing is truly ever free.


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Matthew Hunt has been helping small businesses get set-up with Canadian Merchant Account Services since 2007 and helped 1000's do so. Join Matthew on Google+.

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