In today's small business environment, there are plenty of businesses who are still cash only. In fact, 55% of small businesses are operating as cash-only. The most common rebuttal that comes from these businesses is generally along the lines of "we have never accepted cards, and we have done just fine." But the landscape has changed drastically. Electronic payment methods have increased dramatically in the past five years with stores now accepting not only credit cards, but also ApplePay, PayPal, Android Pay, and many more. There is much less incentive now for the consumer to travel with cash. Could they get cash to do business with you? Of course, but why put an obstacle between your customer and a successful sale. Here are some of the reasons that the cash-only model may be flawed:
1. Limiting Potential Sales -
I can personally attest to this one. Two recent instances that I came across came in a local record store and a local meat vendor at a farmers market. In both occasions I approached the counter with an arm load of merchandise, only to walk out empty handed after learning that it was a cash only vendor and I had none on me. Even in the case of a farmers market, more and more vendors are going to handheld credit card processing in order to assure that they are maximizing sales. Recent studies showed that roughly 10% of consumers carry NO cash on them. Of the ones that do, more than 40% are carrying less than $20. In my record store example I initially approached with $60 in merchandise, only to settle for $10 when I had to pay cash only. Between the two transactions, I left $110 in sales behind at the store. Don't let this happen to you.
2. Consumer May Not Have Cash for Large Services -
This one is particularly important in service industries. Consumers are often faced with emergencies or other types of unplanned expenses, and in the case of home services, they may be large expenses. When faced with a large bill, consumers may find themselves seeking vendors who accept credit cards in order to float the unplanned expense. Don't lose customers to the 'other guy' not based on level of service, but simply the ability (or lack there of) to take a payment method.
3. Get paid TODAY -
This is a big one. While you may be comfortable taking cash, what happens when you have to leave a large invoice with your customer? Are you calling to find out where that payment is in 30, 60, or 90 days? Do you have to retain counsel in order to collect outstanding bills? Would you rather pay a small percentage to a payment processor in order to collect your money immediately and not have to worry about the billing process? The costs of waiting for that money, or simply never getting it, may by far surpass the small processing fee associated with credit cards.
4. Cash does not offer incentive to the customer
This is a two-fold perk for the customer. First, cash back credit cards, travel points, or other incentives have moved customer towards using a credit card for all transactions in order to accrue rewards. More and more consumers are even using credit cards to pay household bills. Additionally, credit cards offer consumers a variety of levels of protection in doing business. Now why should you concern yourself with this? Because a happy, incentivized, and confident consumer is your best customer.
This is just the tip of the iceberg, there are many more reasons why accepting a credit card will benefit a business. Another reason for delaying credit card processing for businesses is that they are simply overwhelmed with the various options out there for small businesses. Options ranging from simple handheld devices, to full blown point-of-sale implementations.
This is where Motif comes in. We can help you not only wade through the vendor selection process, but we can also assist with integration, implementation, and training on the new system. Let us help you make a seamless transition into taking credit cards and together we can watch your revenue increase to new levels. Give us a call to discuss.