cards does add a slight amount of complexity and cost to a
previously cash-only business. However, the cost of not accepting credit cards
can be high as well. Many customers these days simply do not carry cash, so if
they cant pay with plastic, they wont buy. And then theyll go buy from a business
that will do credit
Over and above lost dollars, businesses that do not accept credit cards or
have an insufficient credit
card processing system risk being perceived as
unprofessional. Conversely, accepting and processing credit cards correctly
and easily can raise a small or mid-sized business in the eyes of the customer,
making the playing field more level against bigger competitors.
Considering this matter from the customers perspective is a worthwhile exercise.
Cards Offer Convenience
More than any other reason, customers use credit cards because theyre convenient.
Swipe and go, then receive a detailed statement at the end of the month noting
the charges. Its a procedure that people have gotten used to and enjoy.
Its just so darn easy.
This easy feeling rubs off on businesses that engage in credit
Cash Doesnt Offer Givebacks
Credit card companies are quite creative when it comes to rewarding their customers,
adding another layer of incentive for credit card use. Customers often think
of the airline miles or shopping dollars they are acquiring as theyre swiping
their card over and over again. Unlike cash, which leaves the hand and is
gone, credit card
processing has a giveback aspect to it.
This giveback aspect rubs off on businesses that engage in credit
Credit Card Refundability
Reputable credit card companies, especially American Express, frequently offer
some level of buyer protection. Especially in the case of online sales, the
buyer protection clause is not to be underestimated. Studies have shown that
this protection relaxes buyers, and is one of the main reasons responsible
consumers often prefer to use credit cards. Not everyone is out charging
up the card as an act of irresponsibility. Some people are doing the exact
This feeling of being protected rubs off on businesses that engage in credit
Better Credit Processing Technology Means Lower Cost
With the improvements to credit
card processing technologies, the whole deal
has gotten pretty easy, especially after the initial set-up is completed.
Credit card processing can occur on the Internet, through point-of-sale terminals
specially installed, even through mobile phones.
card processing is a lot cheaper than it used to be. Transaction
fees industry-wide are regularly under two percent of gross sales, and all
sorts of freebies are thrown at new customers, including free installation
and reduced monthly rates. Its a buyers market.
Business decision-makers who have ruled out processing
credit cards may want
to take a new look at the possibility. There is nothing inherently wrong with
making the decision to not deal with credit card processing at all. But processing
credit cards can draw in more customers.
CARD--Credit Card Industry Research
Federal Trade Commission