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The Pros and Cons of Accepting Credit Cards

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Last editedDec 20212 min read

For decades now, credit cards have become a ubiquitous part of our daily financial lives. Not only do they make retail shopping more convenient and streamlined but they also offer a greater level of cover for more extravagant purchases and allow us to live virtually cashless lives, which has never been more relevant post-pandemic.

Even as interest rates continue to climb, more people than ever before are using credit cards. So, as a small business, it makes sense that you’d want to accept credit card payments. But while accepting credit card payments is certainly an obvious way to expand your business’ capabilities, it does come with a few obvious and not-so-obvious drawbacks.

The advantages of credit cards for your business


There is something of an entitlement that has built up in the months following the pandemic that’s led many customers into assuming that every business accepts contactless payment. If your business is not equipped to process credit card payments you are likely to miss out on the custom of these individuals as they rarely carry cash and are unlikely to want to waste their time walking to an ATM. Credit card payments are also an obvious benefit when processing online payments, where bank transfers can be time-consuming and costly.


Accepting credit cards broadens the base of the business and removes the geographical barriers, as any business can easily accept credit card payments from anywhere in the world at any time. It’s also been proven that accepting credit cards leads to increased sales as customers are more likely to make impulsive purchases with a card than with cash.


With credit card payments, the money will always reach the business’ account within a few days. There is no need to invoice customers or wait for payment checks to clear. With credit, you’ll receive your payments faster and they will generally be more reliable, leading to a stronger and better optimised cash flow.

The disadvantages of credit cards for your business


There are always going to be credit card charges for businesses that you won’t get with cash payments. This transaction fee will be a small percentage of the total sale amount and while it will be a minimal amount, those amounts do add up. It’s also worth noting that some credit card companies charge monthly fees depending on the rental of equipment and other expenses.


At some point, a customer is going to dispute a purchase or ask for a refund. While a cash refund would have to be handled directly by the business, it’s the credit card company that will often issue the refund directly to the customer. Then there is the charge-back fee to consider, which is usually a small percentage of the original total.


This is a concern not only for the customer but for the business too. Legitimate cash transactions are notoriously difficult to defraud but accepting credit cards and online payments leaves a business open to data breaches and other fraudulent behaviours. Of course, it’s the credit card companies that often absorb the costs of fraudulent charges, however, your business will still have to pay processing fees, charge-back fees and potential shipping costs for online purchases.

Charge or no charge?

While a few years ago it might have been a more difficult decision to make given the potential drawbacks, the pandemic has catalysed a slow march into a cashless society. There’s no turning back now.

As such, while it will cost your business resources in the short term, there are very few situations remaining where we’d say accepting card payments was a bad choice.

We can help

If you’re interested in finding out more about credit cards, or any other aspect of your business finances, then get in touch with our financial experts at GoCardless. Find out how GoCardless can help you with ad hoc payments or recurring payments.

Over 85,000 businesses use GoCardless to get paid on time. Learn more about how you can improve payment processing at your business today.

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