Thanks to mobile card reader technology, it’s easier and cheaper than ever before for small business owners to accept credit card payments. If your small business doesn’t take credit cards, it’s time to change. Why?
Simple — it’s because accepting cards can be the best thing you’ve ever done to grow your business. You’ll attract more customers, make more sales, improve your cash flow, shore up security, slash expenses and more. Here’s why your small business needs to start accepting credit cards, sooner rather than later.
You’ll Boost Sales and Cash Flow
Numerous studies have shown that when customers pay cash, they spend less money. That’s because paying with cash creates a tangible feeling of loss; customers can literally see their assets diminishing. They hand over an amount of cash to pay the bill and get back much less. But when they use a credit or debit card, they hand over the card and get the same card back — and the bill doesn’t come for a month. This veils the loss of assets and makes it easier for customers to rationalize impulse purchases.
As a result, customers are likely to spend more when they’re allowed to pay for purchases with plastic. Nor are they limited to spending the amount of cash they have in their wallets. Instead, they’re limited to their account balance or borrowing limit, which can be much, much higher.
You’ll Get More Customers
Fewer and fewer people are carrying cash these days. In the United States, for example, only 23 percent of point-of-sale transactions are carried out using cash. Of Americans who do carry cash, two-thirds carry less than $50 at any given time. Americans love to pay for purchases with credit and debit cards.
Things are different in India, of course, where the older generation remains entrenched in the cash mindset. But Indians are increasingly adopting mobile pay services — smart phone apps that allow consumers to pay electronically without cards. Any decent merchant services provider will offer you the flexibility to accept all the forms of payment that your customers want to use, including credit cards, debit cards and mobile pay options. When customers realize that they have the option to pay using the method they prefer, they’ll be more likely to come to your shop — and they’ll tell their friends, too.
Handling Less Cash Is Safer
The trouble with cash is that it can be easily stolen, and once a thief has his or her hands on it, he or she can spend it as he or she pleases. You can’t get it back once it’s gone.
Dealing only with cash means you’ll have lots of cash on hand in your business, and that leaves you vulnerable. An unscrupulous employee could easily rob you blind. Someone could rob you while you’re carrying cash to the bank to deposit it. A robber could even come in and rob you at gunpoint, cleaning you out. The less cash you have on hand, the less vulnerable you are to theft.
You’ll Gain the Flexibility to Accept Online Payments
Accepting credit card payments doesn’t just mean handling card-present transactions. It also opens up the possibility of making online sales. That can create a whole new stream of revenue for your small business. And in addition to accepting credit and debit cards online, you can also accept alternative forms of digital payment, such as PayPal.
You’ll Save Money
It might seem counter intuitive to say you’ll save money by accepting credit and debit card payments. Don’t these payments incur transaction fees? Yes, they do. But handling cash has its costs as well. You have to pay for cameras, locks, safes, silent alarms and other security features to keep cash safe on your premises or while you’re transporting it. You have to pay the costs of transporting cash to the bank for deposit. You have to spend time counting cash, recording cash transactions by hand, preparing cash for deposit and actually taking it to the bank.
All of these hidden costs add up. One study by Tufts University researchers found that small business owners are typically unaware of the expenses related to handling cash. Another study found that debit card and credit card transactions were significantly cheaper than cash transactions, with debit card transactions costing about $0.43 each, credit card transactions costing $0.67 per transaction and cash costing a whopping $1.06 per transaction.
Your small business can benefit greatly from accepting credit card and mobile payments. Bring your business into the digital age and reap the rewards of offering your customers more payment options.