Small Business Versus Corporate Credit Cards
Many companies compare business credit cards versus corporate credit cards. While small business owners are usually the target market for business credit cards, larger organizations such as corporations or governments take advantage of so-called corporate credit cards. The usually higher fees necessary to establish a corporate credit card account makes sense for a large number of card users.
Small businesses usually maintain careful watch over expenses, and small business credit card processing costs can mount. Because small businesses want to accept customer credit cards while building strong credit, choosing the right small business credit card processing or payment processing services is an important consideration.
Small businesses account for most of the new jobs growth in the United States and are considered the driving force behind economic expansion. (Fiscal Year 2013: Analytical Perspectives: Budget of the U.S. Government) That is one of the reasons that small businesses should pay careful attention to commodity costs, such as payment processing services. A quick Internet search yields thousands of potential credit card processing resources, from basic credit card processing (with virtual terminals), mobile readers, and more complex card processing equipment. And small business owners may not know that all payment processing services are not alike.
Turnkey payment processing
Small business principals have different card processing needs. A retailer with high volume traffic at the mall may want the ease of a plug-and-play small business credit card processing system. In this scenario, the retailer may be willing to pay five percent of each customer transaction (including gateway fees, processing costs, statement fees, and interchange tolls from American Express, Visa and MasterCard).
In comparison, another small business still processes their customers’ transactions in quickly and saves substantially on costs. The business has a merchant account that enables credit card acceptance. The account allows the business to accept the customer’s payments and make money in today’s world of electronic payments without charging excessive per credit card transaction fees.
Reducing card processing costs
Clearly, a healthy small business paying five percent or more per transaction is paying a small business credit card processing concern a very handsome sum. Unfortunately, fees given to the processor are monies lost forever by the business. A reduction of payment processing fees can have a positive effect on the small company’s bottom line.
Reducing costs are as important to producing revenues for most businesses, including the largest corporation or government. That is one of the reasons a large organization’s purchasing department carefully evaluates costs before signing any corporate credit card vendor agreement.
Building business creditworthiness
Most businesses also want to lower the cost of borrowing, so building business credit is also an important reason to select credit card resources with care. For example, a merchant account provider may report the account holder’s payment history to the three major business credit reporting agencies (CRAs).
Conclusion
A comparison of small business credit cards versus corporate credit cards yields a simple, important truth: Small businesses can take greater control over their expenses to achieve a higher return on investment while building a credit file. Lowering payment processing services can help.
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