In Tough Economy, It Pays to Accept Credit Cards
Increasing your sales volumes, customer service, and overhead costs can be as easy as the swipe of a card.
At a time when every dollar counts, your business may be hurting its bottom line if it doesn't accept a diverse range of payment options.
Retail and hospitality merchants can't afford to ignore credit cards, debit cards, and other electronic payment methods during the current economic crisis. Consumer spending remains sluggish, despite some signs of economic stabilization. As profits have evaporated, many businesses are finding themselves under pressure to spur sales and improve operational efficiencies.
Many merchants believe they're cutting costs by accepting cash and checks only, but that's no longer true. Today's credit card processing rates and fees are extremely competitive. These low costs are offset by the profits merchants stand to make by opening up their businesses to a broader customer base.
If you want to be well-positioned to fight the consumer spending slump and stay competitive during the worst of recessionary conditions, accepting electronic payments can help your business reach those goals.
Improved Customer Satisfaction
In our increasingly cashless society, it's difficult to compete if your business only accepts check, money order or cash payments. Consumers want options. Establishing a 'merchant account' will enable you to accept credit cards, debit, EBT and check cards as additional forms of payment, providing your customers with a faster and more convenient shopping experience. This way, if they don't want to pay using cash or check, they don't have to take their business to one of your competitors.
By providing a quick and easy purchase experience, you'll improve your overall level of service, resulting in greater customer satisfaction and loyalty. There's also a secondary psychological benefit to accepting electronic payment options. The signage and marketing support that your business will receive from credit card companies lends credibility to your business. It's a signal to consumers that this is a business that they can trust.
Higher Sales Volume
Accepting electronic payment options helps to generate a higher volume of sales. It allows businesses to reach those customers who do not like to carry cash or checks, as well as to easily process international transactions without having to convert currencies. Electronic payment processing is also essential for improving the efficiency of mail, phone, Internet, and mobile transactions.
Beyond attracting a wider customer base, electronic payment processing helps to increase the size and frequency of purchases. Customers who pay via credit card are more likely to place larger orders, shop more frequently, and make impulse buys. And, since the speed of each transaction is improved, businesses are able to process a higher number of payments in less time and generate greater profits.
Reduced Overhead Costs
Enabling customers to pay by credit cards and other forms of electronic payment is also a great way to reduce operating costs and improve your bookkeeping. Accepting electronic payments is cheaper and easier than mailing invoices, and results in faster settlement and fewer past due receivables. There's less cash handling and a reduced need for payment reconciliation. It's also more secure, leaving your business less vulnerable to theft, fraud, and bad check costs.
Since electronic transactions are authorized instantly and funds can be automatically deposited into your checking account within 48 to 72 hours, you'll also benefit from greater cash flow. No longer will you have to wait to send an invoice, make a deposit, or clear a check, thus allowing you to improve the way you do business at every level.
Whether your business prospers or perishes depends on how you respond to challenges presented by the harsh economic climate. Business adaptability is crucial. Electronic payment processing presents opportunities in both the short term and when the economy improves. Protect your business by using electronic payment processing to help minimize losses, streamline operations, and increase sales opportunities.
Debbie King is a freelance writer who has written on a wide array of topics, with special expertise in the healthcare, accounting and finance, hospitality, and manufacturing industries.