Merchants’ Reasons for Not Accepting Credit Cards

Information verified correct on September 28th, 2016

With the popularity and ease of credit cards, it would leave many to wonder why businesses would still consider only accepting cash and cheques as their only forms of payments.

Even today, in the age of technology and convenience, we all still will pass by those shops and see the signs that say credit cards are not accepted. While consumers may not understand the reasoning behind not being able to use credit cards, if you were to take a step in the merchants shoes, you may be surprised by the facts that you discover. Let’s take a look at some the reasons which make merchants not want to allow credit card payments in the their stores.

Credit Card Fees

This is perhaps the greatest reason why a business owner does not want to allow credit card payments. The credit card fees are especially the most taxing to those businesses who offer low end and cheap products and services.

The lower the sales price, the higher the percentage lost in paying credit card fees. In order to keep overhead costs down, instead of increasing prices and losing loyal customers, some business owners would rather just not pay the frivolous credit card fees that are eating into their profits.

Increase in Fraud and Theft

Fraud and theft is a big security concern for both parties: the merchant and the consumer. Nobody wants to deal with having money accidentally charged to them and then having to go through the process of getting it back. The act of processing a chargeback in itself is enough to deter merchants away from credit card usage. Chargebacks require time, energy and resources in order to maintain safety and security. This hassle can be avoided when merchants choose to only accept cash payments, thus completing the sale at the precise moment purchase.

Extra Training

In order for a business owner to accept credit card payments, they must train their employees to be able to process the payments. Depending on the sophistication of the credit card processing system, an employee might have to take classes or attend some sort of seminar before being able to efficiently process payments while on the job. In essence, this costs the merchant money in salary for the time spent just to learn how to accept payments. In addition to learning how to process payments, employees must learn how to protect the merchant from fraud and theft. They must learn how to inspect a credit card and verify legal photo identification.

Extra Administration

With credit card payments comes a whole new way of tracking and logging purchase orders. If you choose to partner with a credit card lender to accept payments, you must set up some sort of network to go between the two of you and set up some sort of shared database of purchase logs. This can be very tedious and time consuming. This would require more training on the parts of the employees.

The simple reasons above should provide a sufficient insight to the challenges merchants face when dealing with credit card processing. The reasons above should also help shed some light in understanding why it may be beneficial for a merchant to not use credit cards as well.

Was this content helpful to you? No  Yes

Related Posts

Ask a Question

You are about to post a question on finder.com.au

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Disclaimer: At finder.com.au we provide factual information and general advice. Before you make any decision about a product read the Product Disclosure Statement and consider your own circumstances to decide whether it is appropriate for you.
Rates and fees mentioned in comments are correct at the time of publication.
By submitting this question you agree to the finder.com.au privacy policy, receive follow up emails related to finder.com.au and to create a user account where further replies to your questions will be sent.

Credit Cards Comparison

Rates last updated September 28th, 2016
Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee
Virgin Australia Velocity Flyer Card - Balance Transfer Offer
Enjoy a 0% p.a. balance transfer offer for 18 months and also earn 2 bonus Velocity Points in the first 3 months on everyday spend.
20.74% p.a. 0% p.a. for 18 months $64 p.a. annual fee for the first year ($129 p.a. thereafter) Go to site More info
ME Bank frank Credit Card
Enjoy a low and consistent interest rate on purchases and cash advances, combined with no annual fee.
11.99% p.a. $0 p.a. Go to site More info
St.George Vertigo Visa
Introductory offer of 0% p.a. for 18 months on balance transfers and 1% p.a. for 12 months on purchases, plus a low annual fee.
1% p.a. for 12 months (reverts to 13.24% p.a.) 0% p.a. for 18 months $55 p.a. Go to site More info
HSBC Platinum Credit Card
Receive a full annual fee refund and save $149 if you meet the $6,000 spend requirement. Enjoy a balance transfer offer and platinum card benefits such as complimentary insurances and concierge services.
19.99% p.a. 0% p.a. for 15 months $149 p.a. Go to site More info

* The credit card offers compared on this page are chosen from a range of credit cards CreditCardFinder.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.

Ask a question
feedback