10 Feb Why Cash Only Businesses are a Risk to the Business Owner?
Consumers nowadays are excited about tap-and-pay mobile apps, relegating credit cards and checks to a deep cave of the wallet or purse. With that being said, more than 50% of small businesses still live in the stone age—forget mobile applications, they don’t accept credit cards period, or anything else other than cash. What are they leaving behind? Roughly $100 billion in annual sales. What does your business have to gain from obtaining a merchant account?
Industry research shows that providing a form of credit card processing can increase revenue by up to 23%. Expanding your payment options also makes your products and/or services more available to current and potential customers. Furthermore, a shrinking number of consumers carry cash on hand, and an even lower number prefer to pay with it. Giving your customers another option when they don’t have cash affords them a convenience while improving your bottom line.
Faster Checkout Process
Electronically processing transactions will significantly increase the speed of your checkout line. Some credit card processing systems are almost instantaneous, depleting the time and risks associated with cash being counted and exchanging hands. Furthermore, you will get your money much faster because you won’t be forced to wait up to 90 days for checks to clear. Funds resulting from a credit or debit card transaction are often deposited into your bank account within three days. Electronic payments also improve cash flow, which leads to lower billing overhead.
Customers will Spend More
Getting a merchant account will also boost your average sale. Customers tend to spend more freely when paying with a credit or debit card than with cash or check. They are actually more likely to spend around 20% more per transaction. This increased ticket size will more than cover the small fees encountered from making this much needed investment.
Like it or not, not accepting credit cards is a red flag for new customers. Many consumers associate your ability to accept credits with your credibility as a business. Current customers will also start to spend more once you offer more convenient payment options.
A Better Customer Experience
Offering credit cards as a form of payment shows that your main goal is to service your customers any way you can and it will translate into customer retention. Furthermore, new payment technologies made possible by smartphones and other devices are on the path of rendering physical credit cards obsolete- so just imagine the future that lies ahead for cash.