The true cost of accepting debit and credit cards
Credit and debit cards provide convenience for consumers, but they come at a steep price for retailers. As fraud attempts rise exponentially and processors hike their fees, the true cost of accepting plastic continues to grow every year. Let’s break down the key expenses and risks retailers take on with each consumer card swipe.
Fraud losses mounting rapidly
Today the United States accounts for nearly half of global credit card fraud and these losses are projected to exceed $12.5 billion by 2025. Shockingly, it is estimated that somewhere around 80% of cards currently in circulation have been compromised in one of the many data breaches plaguing nearly every business in the past few years.
What may surprise most retailers is that fraudsters rarely go for the big money with stolen credit and debit card data. Rather they tend to target small transactions, usually under $100. Those small-dollar criminal purchases now make up 55% of all fraudulent card use.
Unfortunately, those tiny transactions add up and consumers, realizing they’ve been compromised, contact their bank or credit card company. When one of those companies initiates a chargeback, the retailer is often denied payment, even though the merchandise has already walked out the door. Still, while large retailers have resources to fight fraud, small businesses often eat those “nickel-and-dime” losses.
