In today’s digital world, it is hard to believe that a big part of the small businesses still does not accept credit cards. Cash may be the most commonly accepted form of payment for small business owners, but the benefits of accepting credit card transactions outweigh the cons.
If you are thinking about starting a business or expanding your current payment options, accepting credit cards is an excellent way to increase sales, improve cash flow and minimizes some of the risks for your business. Here are 6 good reasons that prove that .
1. The ABILITY to accept debit and credit card payments
By displaying the logos of the credit cards, you accept at your cash register or on your website, you grab a cardholder’s attention and create in them a sense of trust in your business. They trust the credit card brands enough to carry them in their wallets, and that trust transfers to the merchants who accept them.
According to this paper (by Professors at M.I.T.), customers tend to spend more money and make more impulse purchases when using a credit card, compared to when paying cash. In addition, another study by Intuit Inc. found that 83 percent of small businesses who began accepting credit and debit cards payment saw an increase in sales. And this is another benefit invariably connected to the ability of accepting debit and credit cards. When you take your business from a cash-only operation to one that accepts credit and debit cards, your potential customer base broadens tremendously. The more customers you attract, the more likely you are to make additional sales.
2. Customer convenience
So, you accept debit and credit card payments, which means you have a merchant account. And that can lead to happy (and returning) customers simply because it gives them the flexibility to make purchases in different ways. Whether it is with credit or debit cards, online payments through a shopping cart for your services, mobile payments, or recurring billing, your customer will enjoy their experience with your business when they can shop how and when they want—with ease. Which leads to the third benefit, increase average ticket size.
3. Increase average ticket size
Customers typically spend about 18 percent more when paying with credit cards. Experimental research shows that by removing cash from the equation, you encourage people to spend more. In fact, people are often willing to pay more for the same product when using credit than when using cash.
4. Better money management
By using a merchant account to accept digital payments, you can more easily stay organized and manage your cash flow. Your PSP can send you detailed monthly statements of all transactions that have been made, with which currencies, and with which payment methods, among other information. This makes it easier to deal with taxes and keep an eye on your profits. If you use merchant account services provided by a PSP, you will also be able to view and manage all payments through an online interface where you can login to track your payment activity.
5. Avoid bad checks better
One bounced check can take a big chunk out of your profit for the day, not to mention the time wasted tracking down the customer to make good on the sale. Credit card transactions are screened as they are processed to reduce the risk of fraud.
6. Receive online payments
And, lastly but not least we all know that most of the transactions on the Internet are paid for with credit cards. Which means that if you are an e-commerce merchant, you cannot afford not to accept plastic.
If you’re still unsure if accepting credit cards will benefit your business, you should speak to any payments provider to determine how much credit cards will cost you annually, in comparison to the potential profits you could be losing by denying customers that option.
Also, keeping large sums of cash on hand is a security risk for business owners. It has been discussed so many times it became a stereotype. That is the reason the minimized security risks benefit is not included in the text above. But, it is obvious – the less cash you have on your premises, the less attractive you will be to criminals and corrupt employees.
- Feinstein E. (2017). The 4 Benefits of Having a Merchant Account. Retrieved from http://blog.directpay.online/4-benefits-of-a-merchant-account.
- 4 BENEFITS OF A MERCHANT ACCOUNT. Retrieved from http://blog.bluepay.com/4-benefits-of-a-merchant-account.
- Grullon Y. (2016) ACCEPTING CREDIT CARDS: 5 BENEFITS THAT BOOST YOUR BUSINESS. Retrieved from http://www.shopkeep.com/blog/benefits-accepting-credit-cards#step-1.
- The Top 10 Benefits of Accepting Credit Cards. Retrieved from http://www.transfirst.com/resources/merchant-basics/top-10-benefits-of-accepting-credit-cards.
- The Benefits of a Merchant Account. Retrieved from https://paysimple.com/blog/the-benefits-of-a-merchant-account/.