Credit Cards

1. 1

   Half (49%) of small businesses accept credit and/or debit cards as a form of payment and
   half (51%) do not. Credit cards pay for about five times as many small business goods and
   services as do debit cards.
   

2. 2

   An average of one in every three (33%) dollars in sales is paid by card among those small
   businesses accepting cards.
   

3. 3

   VISA is universally accepted by small businesses that take credit and/or debit cards and
   MasterCard is taken almost as frequently (98%). American Express is accepted by 60
   percent and Discover by 59 percent.
   

4. 4

   Small business owners accepting cards pay an average fee of 2.3 percent of card sales for the
   right to use VISA, 2.3 percent for MasterCard, 3.2 percent for American Express, and 2.5
   percent for Discover. Small business owners shop frequently to minimize the fee they pay
   and often switch processors of their credit card receipts.
   

5. 5

   Fourteen (14) percent of small businesses accepting cards give cash discounts; 29 percent
   would charge a fee to card-holders on transactions paid by credit card if their contract
   allowed them to do so; 13 percent have a minimum purchase on credit card sales.
   

6. 6

   Disputes between small business owners and credit card companies or banks regarding some
   aspect of accepting cards as a form of payment are uncommon. Four percent experienced
   such a dispute in the last 12 months. Still, twice that number (8%) over the same time
   frame incurred a “hidden penalty” for violating a portion of their contract of which they
   were unaware.
   

7. 7

   Virtually all small businesses (97%) have someone who reconciles their credit card receipts
   with the records of the bank or credit card receipt services provider. Owner/managers (35%)
   and employees (36%) are the individuals most likely to perform the reconciliation. Reconciliation
   is important as 14 percent found mistakes made by the bank or services provider
   in the last 12 months.
   

8. 8

   Seventy-four (74) percent of small employers have a business credit card(s) and a nonmutually
   exclusive 39 percent use a personal credit card(s) for business purposes. These
   data indicate a rapid rise in the number possessing the former and a moderate decline in the
   number using the latter. Seventeen (17) percent do not use cards for business purposes.
   

9. 9

   Sixty-two (62) percent of small employers have a line of credit, a source of credit sharply
   distinguished from credit available on credit cards. The use of lines has also risen rapidly
   over the last five years. There is no evidence that cards are substituting for lines.
   

10. 10

    Small business owners, as credit card consumers, in the last 12 months often experienced
    abusive practices by the industry. For example, 14 percent did not receive credit for
    payments until well after the payment cleared and 11 percent were charged overdraft fees
    when the overdrafts were the exclusive result of bank holds.

Volume 8, Issue 3, 2008
ISSN 1534-8326

William J. Dennis, Jr.
NFIB Research Foundation

• 1Does your business accept credit or debit cards as a form of payment?
• 2Approximately what percent of your total dollar sales is paid by credit or debit card?
• 3Do you accept credit or debit card payments in face-to-face transactions?
• 4Do you accept credit or debit card payments over the telephone?
• 5Do you accept credit or debit card payments over the Internet?
• 6Approximately what percent of your card sales are credit card sales?
• 7Approximately what percent of your total card sales are debit card sales?
• 8Do you accept VISA?
• 8aEvery time a customer uses a VISA card to make a CREDIT transaction, approximately what percent of the sale on average are you charged?
• 8bDid you shop around to find a better deal before settling for the fee you now pay?
• 8b1Why didn’t you shop? Was it because you:?
• 8cAfter shopping, did you switch from a different vendor to the one you have now?
• 8dDid you or your industry trade associate negotiate this fee or were you told the fee?
• 8eWhen the current contract expires, do you plan to shop for a new vendor to process your credit card receipts?
• 8fDo you NOW deal directly with a bank or a credit card services provider to process your VISA receipts?
• 9Do you accept MasterCard?
• 9aEvery time a customer uses a MasterCard card to make a CREDIT transaction, approximately what percent of the sale on average are you charged?
• 9bDid you shop around to find a better deal before settling for the fee you now pay?
• 9b1Why didn’t you shop? Was it because you:?
• 9cAfter shopping, did you switch from a different vendor to the one you have now?
• 9dDid you or your industry trade associate negotiate this fee or were you told the fee?
• 9eWhen the current contract expires, do you plan to shop for a new vendor to process your credit card receipts?
• 9fDo you NOW deal directly with a bank or a credit card services provider to process your MasterCard receipts?
• 10Do you accept American Express?
• 10aEvery time a customer uses an American Express card, approximately what percent of the sale on average are YOU charged?
• 11Do you accept Discover?
• 11aEvery time a customer uses a Discover card, approximately what percent of the sale on average are you charged?
• 12Do you give discounts to customers who pay in cash rather than by credit card?
• 13If your credit card contract allowed you to charge customers extra for using a credit card, would you institute such a policy in your business?
• 14Do you require a minimum purchase for customers to use credit or debit cards?
• 15Do you own your credit card equipment or do you lease it?
• 16Do you accept PayPal as a form of payment?
• 17Within the last 12 months, have you experienced a “hidden penalty,” that is, a penalty for violating a provision of your credit card contract that you were unaware of?
• 18Within the last 12 months, have you had any disputes with a credit card company or a bank about any aspect of accepting credit cards as a form of payment?
• 19On behalf of your business, who reconciles your records of credit card receipts with the records of the bank or the credit card company?
• 19aWithin the last year, have you found a bank or credit company error in their records of your credit card receipts?
• 20Within the last three years did you accept one or more credit cards that you now refuse to accept?
• 21Do you use one or more business credit cards to pay business expenses?
• 22Do you use one or more personal credit cards to pay business expenses?
• 23AYou made a payment and the bank and/or the credit card company withdrew the money from your account, but you didn’t get immediate credit for your payment?
• 23BExcluding case involving an introductory offer, the interest rate on your outstanding balances was increased?
• 23CYou were given less than three weeks notice of the due date for a credit card payment?
• 23DYou were charged overdraft fees on overdrafts due exclusively to bank holds on a portion of your account?
• 24Do you typically pay the balances on the credit card or cards you use for business purposes at the end of each month?
• 25Do you have a line of credit at a financial institution, not including credit cards?