Blog » Business Tips » Why Accepting Credit Cards Can Increase Your Profitability

Why Accepting Credit Cards Can Increase Your Profitability

Updated on December 28th, 2021
Why Accepting Credit Cards Can Increase Your Profitability

If you’re a small business owner, specifically brick and mortar shops, you’re constantly on the lookout for ways to improve your bottom line. The easiest and most effective way to increase your profitability is to accept multiple forms of payments — specifically credit cards.

I know you may have been hesitant to take all credit cards because you’re concerned about security breaches and credit card processing fees. While these are valid reasons and thoughts, the fact of the matter is that the benefits of accepting credit cards far outweigh those costs and concerns.

Still need more convincing? Here are the ways that accepting credit cards can increase your profitability.

Credit cards legitimize your business

Credit cards legitimize your business.

When your business displays credit card logos that you accept either in-person or on your website, not only do you grab the attention of the cardholder, but you also give them peace of mind. Customers trust the credit card brands that they use. So, if you accept those cards that are in their wallets, then you must be a legitimate business.

Credit cards encourage impulse buying

Credit cards encourage impulse buying.

Research has found time and time again that credit cards can boost sales because customers spend more when they use plastic — mainly because it encourages impulse buying.

According to one study conducted by Dun & Bradstreet, people spend 12-18 percent more when they use credit cards instead of cash. Additionally, a McDonald’s study has found that its average ticket sale is $7 when people use credit cards, while it’s $4.50 when people use cash.

Credit cards improve cash flow

Credit cards improve cash flow.

Since credit card transactions are processed electronically, they’re often settled quickly. In fact, proceeds are often deposited into your business’s bank account by your processor within a couple of days. This is without you having to visit your bank and physically deposit cash or checks — which saves you time and money. Thanks to advances digital wallets and the blockchain, transactions are now taking place in real-time.

To Increase Your Profitability – Credit cards help you compete.

Only 9 percent of customers prefer to use cash. 43 percent of customers prefer debit cards, while 35 percent prefer credit cards. This means that a majority of customers want to use plastic when they shop. So, what do you think that they’ll do if you don’t accept credit cards and your competitors do? It’s not hard to discover that they’re going to jump ship — and shop and support other businesses that accept their preferred payment method.

Credit cards keep you and your customers safe and happy

Credit cards keep you and your customers safe and happy.

Accepting credit cards keeps your customers happy because it’s convenient and, as previously mentioned, it’s their preferred payment method. Furthermore, credit cards come with perks like rewards and cashback.

All of these reasons may seem trivial, but these small advantages keep your customers happy and content. When your customers feel satisfied and unafraid, they become more loyal to you and your business and will refer your business to others. Also, credit cards protect them from fraudulent or unauthorized charges.

For businesses, credit cards almost eliminate the time and expense of you counting, sorting, and transporting cash. Not only that, the less cash you have on-hand, the less attractive you are to thieves.

Credit cards — they are expected.

“Cash payments are decreasing,” writes Anita Campbell of Small Business Trends. “Providing the option to pay with a credit card is becoming less a courtesy and more an expectation.”

“Customers are more likely to do business with you if you accept the form of payment that offers them the most convenience and flexibility” – especially for big-ticket items that they can pay off over time.

Many times businesses prefer to do their own testing on such matters as profitability, including with credit card. Test it out. See if you get the same findings.

John Rampton

John Rampton

John Rampton is an entrepreneur and connector. When he was 23 years old, while attending the University of Utah, he was hurt in a construction accident. His leg was snapped in half. He was told by 13 doctors he would never walk again. Over the next 12 months, he had several surgeries, stem cell injections and learned how to walk again. During this time, he studied and mastered how to make money work for you, not against you. He has since taught thousands through books, courses and written over 5000 articles online about finance, entrepreneurship and productivity. He has been recognized as the Top Online Influencers in the World by Entrepreneur Magazine and Finance Expert by Time. He is the Founder and CEO of Due.

About Due

Due makes it easier to retire on your terms. We give you a realistic view on exactly where you’re at financially so when you retire you know how much money you’ll get each month. Get started today.
Categories

Due Fact-Checking Standards and Processes

To ensure we’re putting out the highest content standards, we sought out the help of certified financial experts and accredited individuals to verify our advice. We also rely on them for the most up to date information and data to make sure our in-depth research has the facts right, for today… Not yesterday. Our financial expert review board allows our readers to not only trust the information they are reading but to act on it as well. Most of our authors are CFP (Certified Financial Planners) or CRPC (Chartered Retirement Planning Counselor) certified and all have college degrees. Learn more about annuities, retirement advice and take the correct steps towards financial freedom and knowing exactly where you stand today. Learn everything about our top-notch financial expert reviews below… Learn More