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Why some merchants prefer credit card transactions

Thanks to nearly universal acceptance, credit cards provide more convenience than any other payment method.

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It is unanimous that credit cards allow consumers much more flexibility and ability to increase their purchasing power. When it comes to convenience, credit cards are easily portable and they don't need to carry bills upon bills of cash. Even though there is the possibility of credit card fraud, the credit card is still now the most preferred payment option of almost all merchants.

Mastercard and Visa now have programs in class to prevent fraud from happening, such as Verified by Visa and Mastercard SecureCode. As long as you can prove that you didn't make the purchase, or the purchase was fraudulent, then you're likely to get your money back.

Reasons why some merchants prefer credit card payments

Majority rules

The biggest reason merchants love credit cards is that it allows the consumers and businesses to be part of the majority retail purchasing trend. By accepting credit card payments, merchants are inviting the patronage of all consumers rather than losing customers like those merchants who only accept cash.

Even though merchants have to pay fees to the credit card companies for the ability to accept credit card payments, the benefits and increase in sales make up for the costs. The fees differ depending on the lender but they are usually not high enough to force merchants to not use their services and can be passed onto the consumer in the form of a surcharge.

Saves everyone time

We all know how annoying and irritating it is to wait in line at the register while you or someone else digs through their wallet searching for dollar bills and coins to pay the cashier with. In addition to paying cash, writing a cheque is an even bigger waste of time. Transactions can be sped up with a credit card. With an easy tap of the card or your PIN number, the transaction is complete and you are on your way onto the next task.

Process more orders

It is because of the credit card that product sales over the telephone and Internet have become possible. Before the credit card, merchants would only be able to secure cash payments by requiring the customers to come directly to the retail location in person. This significantly limits traffic and exposure for the merchant. This plays into one of the most basic principles of business, more transactions equals more revenue which then turns into more profits.

Improved cash flow

Credit cards allow merchants to receive their funds much more quickly than having to wait for cheques to clear the bank. When processing a cheque, merchants have to continue operating without those funds which can prove to be problematic. Credit card payments are almost always processed immediately with the merchant receiving the funds in a very short amount of time.

Tighter security

By using credit cards, merchants are holding themselves up to a higher security level with more safety as well. Businesses become lesser targets to theft and robbery when they carry less cash on hand. On the flip side, merchants and consumers are much more able to keep track and log all the purchases and transactions. These usually come in online monthly statements but now every bank and credit card company allows their consumers to check their transactions online as well. This also results in less fraud attempts.

Compare credit cards with refund protection

Data indicated here is updated regularly
Name Product Purchase rate Balance transfer rate Annual fee
Qantas American Express Premium Card
20.74% p.a.
$249
Enjoy 100,000 bonus Qantas Points, 50 bonus Status Credits and 2 complimentary Qantas Club lounge invitations per year. Ends 4 November 2020.
American Express Business Card
N/A
$109
Earn Membership Rewards point per dollar spent on eligible purchases along with refund protection.
Qantas American Express Ultimate Card
20.74% p.a.
$450
Get 55,000 bonus Qantas Points, a $450 Qantas Travel Credit and 2 yearly complimentary Qantas Club lounge invitations.
American Express Velocity Escape Card
20.74% p.a.
$0
Earn 0.75 Velocity Points on your everyday purchases, uncapped, and pay $0 annual fee for the life of the card with this no-frills frequent flyer card.
American Express Platinum Edge Credit Card
20.74% p.a.
$195
Get $150 back when you spend at least $1,500 within the first 3 months. Plus, receive $200 Travel Credit each year.
American Express Velocity Platinum Card
20.74% p.a.
$375
Get 50,000 bonus Velocity Points when you spend $3,000 for the first 3 months. Plus, 100 Status Credits and luxury travel perks.
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Credit Cards Comparison

Data indicated here is updated regularly
Name Product Purchase rate Balance transfer rate Annual fee
Citi Rewards Card - Exclusive Offer
21.49% p.a.
0% p.a. for 30 months
$49 annual fee for the first year ($149 p.a. thereafter)
Finder Exclusive
Save on interest with 0% p.a. on balance transfers for 30 months with no balance transfer fee. Plus, a $49 first-year annual fee and Citi Rewards.
Coles No Annual Fee Mastercard - Exclusive Offer
0% for 12 months, reverts to 19.99% p.a.
0% p.a. for 12 months
$0
Finder Exclusive. Ends 29 October 2020
Save on new and existing interest charges with 0% interest on both balance transfers and purchases for the first 12 months.
Qantas American Express Premium Card
20.74% p.a.
$249
Enjoy 100,000 bonus Qantas Points, 50 bonus Status Credits and 2 complimentary Qantas Club lounge invitations per year. Ends 4 November 2020.
Citi Rewards Card - $500 Voucher Offer
21.49% p.a.
0% p.a. for 12 months
$99 annual fee for the first year ($199 p.a. thereafter)
Get a $500 e-voucher to spend at Myer, JB Hi-Fi or Coles when you spend $3,000 in the first 90 days. Plus, earn points with the Citi Rewards Program.
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* The credit card offers compared on this page are chosen from a range of credit cards finder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your own personal financial circumstances when comparing cards.

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