By Andrea Burkholder

Photo by Nathan Dumlao on Unsplash

When opening a new business, there are a lot of decisions to make. What products or services do you sell? Do you lease or buy your location? How much do you charge? What type of insurance or licenses do you get? The list could go on and on.

One of the most common questions we receive when consulting with companies is whether they should accept credit cards. Even existing business owners who currently accept credit cards aren’t always sure they are managing that part of the business correctly and it’s easy to understand why, the bills are just downright confusing.

With that being said, it’s still a smart business move for your business to accept credit and debit cards.

Here are a few benefits of accepting credit cards you may not have considered.

1 – Accepting Credit Cards Can Improve Cash Flow

Elaine Pofedlt, a financial journalist and editor, states that accepting credit cards can improve a business’s cash flow. We have certainly found this to be true over the years. That’s because when using a traditional merchant processor, credit card payments typically hit the merchant’s bank account within a couple of days of the purchase date, which improves the cash flow of the business. Depending on when you batch out, you could even receive your payment within 24 hours, now that’s fast.

As a business, this eliminates the need to invoice your clients, wait for payments or for checks to clear the bank. In fact, providing your customer with the ability to make an immediate form of payment can negate the need for collection activities. Businesses receive cash faster and easier by accepting credit card payments from their customers.

2 – Accepting Credit Cards Can Help Reduce Your Overhead

Credit cards streamline the payment process. Swiping or dipping a credit card and receiving authorization from the issuing bank takes just seconds — certainly less time than it takes for a customer to write out a check and verify all the necessary information. When you accept credit cards, it helps wrap up your transactions quickly and neatly.

This may not seem like a big deal, but quickly sending a happy customer on their way allows you as a merchant to deal with more customers in less time which creates the opportunity to serve more customers and/or have more time to do your typical daily tasks.

Time Management is something all business owners struggle with so as available time increases, the more time you have to spend working on your’ business versus in your’ business.

Accepting credit cards can also help cut down on the chances you’ll receive a bad check or late payment from your customer. When you accept credit cards, it makes it convenient for your customer. This convenience increases the likelihood of receiving your payment without having to incur the added expense of collection activities. It can also reduce the opportunity for fraud to occur as most reputable Merchant Account Providers screen transactions for fraudulent activities.

3 – Accepting Credit Cards Increases Your Average Sales Order

Were you aware that you’re AVERAGE SALE AMOUNT GOES UP when you accept credit cards? Studies show (and I am sure it’s true of most of us) that when you as a consumer are ready to make a purchase and you are paying with a credit card, you are more inclined to purchase an “upgraded” product or service.

Human nature drives us to purchase the “better model” or “service upgrade” when we can finance the purchase with a credit card.

As an added bonus, having the ability to pay by credit card increases the chances that your customer will make impulse purchases. For example, a customer might come into your establishment to buy a souvenir for a friend, but walk out with a greeting card, a gift bag, a bag of chips, and a soda in addition to the souvenir they originally came to buy.

We generally see an average increase in sales of 23% in locations that accept credit cards. That’s nothing to sneeze at!

High tech solutions that are now available like mobile credit card readers, wireless credit card processing technology and the ability to accept payments online have rapidly expanded your’ options for where, when, and how you do business. You have the ability to break through the four walls of a traditional retail location and can explore new revenue streams with credit card processing. This allows you to get creative with how you conduct your business since credit cards can literally be accepted just about anywhere.

4 – Accepting Credit Cards Increases Your Ability to Compete

Most businesses today accept credit card payments. It doesn’t matter how big or how small the business is, accepting credit cards has become a necessity to stay competitive. If you are a small business, accepting payments in the form of a credit card can help level the playing field with your larger competitors. We’ve found that limiting a customer to a specific form of payment for products and services removes the option of convenience. People by nature prefer the path of least resistance, credit cards give them this convenience.

5 – Accepting Credit Cards Drives Trust in Your Business

Trust is key to your long-term success as a business owner.

While there are a lot of ways to build trust with your customer base, an easy way to start is by placing Credit Card Logo’s at the entrance to your business location.

We love to look for ways to help businesses grow and do a lot of research on consumer behavior. One of the studies we stumbled across early on, is explained in the book Influence by Robert Cialdini. This scientific study identified that the mere presence of Master Card/ Visa logos will increase cash sales by as much as 29% – even when credit cards aren’t utilized! Now that’s CRAZY!

If your business accepts cash, this is an added bonus.

So now that you understand the benefits of accepting credit cards, it’s important to understand that not all credit card processing companies are created equal. If you aren’t familiar with the merchant processing world, it can be difficult to determine which type of processor you should choose and what type of plan you need.

It’s not uncommon for us to determine that a merchant signed up for a costly plan because they were told it was a good plan by a friend, a family member, a referring business or believe it or not, a bank.  In fact, we just helped a distributor located in Rialto, California lower their credit card processing rates by over 2.0%.  This month alone we helped save them over $1300.00 in merchant processing fee’s.  We were able to help this established business by helping them find a new processor, negotiating lower rates on their behalf and by helping them understand how to manage their interchange rates.

I would like to say this is an abnormality, but it really isn’t…..

We work with new and existing merchants across the country helping them determine what their strategy should look like.  If you want help determining if you have the right business strategy, click here  https://oomphconsultinggroup.com/contact/. 

We’d be happy to help!