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.
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.
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.
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.
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.