In a world of smartphones and 24/7 connectivity, small businesses can no longer rely on cash. Today’s consumers expect merchants to offer smarter, flexible payment and invoicing solutions, and at the very least to accept their preferred credit cards.
The latest research by finder.com.au found that the Australian economy now relies on the purchasing power of credit card consumers. Here’s what it revealed:
- There are 16,699,272 credit cards circulating in Australia.
- Australians spend $24,588,101,114 using their credit cards every month.
- 70.19 percent of Australians own a credit card.
The latest credit card readers also allow tradies to send invoices on the run, fast food outlets to set up innovative delivery options, cafes to pay employees more effectively and startups to make better business decisions — increasing sales, cash flow and productivity.
Using research from Roy Morgan and American Express (AMEX), we’ve debunked six common card payment myths:
Myth 1: I don’t have to accept credit cards if my competitors don’t.
Maybe not, but it could affect your bottom line.
According to research completed by the University of New South Wales, Australia could become cash free as early as 2020.
If your competitors still rely on cash, think of the edge you’ll gain by accepting credit card payments. More important, you’ll appeal to the increasing number of shoppers who are already cashless — 20 percent of Australians no longer carry cash, a significant rise from 8 percent just three years ago.
Myth 2: Credit card merchant fees are expensive and not worth it.
It’s standard to incur fees when accepting cashless payments, but there are also key benefits for your growing business:
- You’re able to accept payments anywhere, so you aren’t restricted to running your business from a shopfront.
- By accepting all credit and debit cards, your business has access to more customers and their various modes of payment.
- The global shift towards cashless payment services has given rise to sophisticated software, which allows businesses to gain analytical insights. These can boost sales, reduce costs and improve service delivery.
Square Reader allows merchants to pay as little as 1.9% per tapped, dipped or swiped transaction.
Myth 3: I only need to accept the most common cards.
You might find that most of your customers use Visa, Mastercard or eftpos, but according to Roy Morgan research, Australian AMEX card members spend 92 percent more in a typical month than those who make purchases with other cards.
Further research shows 37 percent of Australian AMEX cardholders go out of their way to visit businesses that accept their preferred method of payment. This provides your customers with added convenience and gives them another reason to return.
Why restrict your revenue by accepting some cards and not others?
Myth 4: There’s no link between customer loyalty and the cards I accept.
Credit and debit cards are attractive because they offer significant rewards and other benefits (such as special discounts or protection against fraud). It’s not surprising then that 57 percent of Australian AMEX card members say they’re more loyal to merchants who accept AMEX cards than those that don’t.
Myth 5: Signs in my shop don’t affect customer purchasing decisions.
They actually do! Placing signs in prominent positions is one of the best ways to reassure customers that you accept their favourite credit card.
Research shows that 55 percent of Australian AMEX card users seek out signs or logos, while 30 percent of non-AMEX members do the same with other credit cards they use.
You can order a sticker sheet from your dashboard if you use Square — it’s free!
Myth 6: Contactless payments pose a security risk to my business.
Data security is one of the biggest issues for modern businesses. However, contactless payment technology comes with advanced security features — your provider’s security policies should at the very least include data encryption, adherence to the PCI Data Security Standard (PCI DSS) or two-factor authentication for your protection.
That’s not to say you shouldn’t take your own preventative measures. Checking customer IDs and looking for holograms on credit cards are extra steps that can protect your business against credit card fraud.
With consumers more empowered in their purchasing decisions than ever before, you can boost revenue by offering them greater convenience and more payment options.
This post was proudly brought to you by our friends at American Express.
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American Express commissioned internet panel survey conducted in April 2017 based on purchases made in the 6 months prior to the survey. Definition of American Express® Card Members: Respondents who reported that they have an American Express Card and that they used that card to make purchases in the prior 6 months. Definition of Non-Card Members: Respondents who reported that they do not have any type of American Express Card and that they used Visa, MasterCard or any other credit card to make purchases in the prior 6 months.