Small businesses are traditionally among the last holdouts when it comes to accepting credit cards. The excuse most often given by merchants for remaining a strictly cash-only operation is the avoidance of high credit card processing fees that would cut into their already slim profit margin.
However, many small business owners have turned what they originally perceived as a negative into a positive for their bottom line. They report that adding credit cards to their payment options has brought in more sales – and larger sales – than they would have had under cash-only circumstances. As the owner of a small Florida-based publishing company recently told AOL Small Business, “Customers sometimes don’t have cash and will invariably buy more on plastic than they will for cash. Would you rather have 100 percent of nothing or 97 percent of $1,000 because you took a credit card?” In his opinion, “turning down credit cards is stupidity squared.”
Savvy small business owners know that accepting credit cards makes their business more attractive to shoppers who prefer the convenience and ease of paying with plastic. According to numbers from American Express, Visa and MasterCard, there were at least 488.9 million credit cards and 520 million debit cards from those brands alone in circulation in the United States at the end of 2010. That’s a lot of cardholders who are looking for those credit card logos in merchants’ windows or on their websites when they’re ready to make a purchase. It’s also a potential market that small businesses really can’t afford to ignore or alienate.
Accepting credit cards means merchants spend less time and effort preparing and making bank deposits. Credit card transactions are quickly processed electronically as a batch transfer at the end of the day. And with less cash on hand, merchants become less of a target of thieves looking for a quick haul (or employees with sticky fingers).
Finally, when customers pay with plastic, merchants don’t have to send bills or wait for checks to clear. The payment process is simplified and the cash flow is maximized when merchants accept credit cards.
If credit cards sound like a good deal for your business, consult with a reputable merchant services provider who can set you up with a merchant account to get started.