As a business owner, you want to close every sale, maintain a healthy cash flow, and deliver a good customer experience. And payments play a big role in that.
You may feel pressure to accept every type of payment (cash, peer-to-peer apps, buy-now-pay-later services or cards) but are torn over the cost of accepting those different methods. So let’s focus on one method that really divides business owners: debit and credit cards.
In Australia, the use of cash and cheques for payments has been falling for many years. This has been recently accelerated through the impact of COVID-19, which has tipped us further towards being a cashless society.
Customers are using cards more and more, but business card acceptance is slightly slower to follow. Here’s what you’re missing if you’re dragging your feet to also accept cards.
1. More customers and more sales
People want convenience. And if shopping with you means a trip to the ATM, they may skip you over and opt for the competition. Accepting eftpos payments allows you to offer the best customer experience possible – which makes people more likely to recommend your business to friends.
If you’re a cash-only business, you should see a significant increase in revenue by starting to accept cards.
Why? Research shows that one-fifth of consumers do not carry cash. Our own survey found that 81 percent of consumers said that they would prefer to pay by card because it’s faster and more convenient than paying by cash.
2. Larger purchases
One strategy to grow your business is to increase your average transaction size. Perhaps it’s because you can’t actually see the money being physically exchanged in a card transaction (as opposed to cash), but people tend to spend more when they tap than when they pay cash.
In fact, a study by Dun & Bradstreet found that people spend 12 to 18 percent more when using credit cards instead of cash. On the conservative end, a business with an average transaction size of $50 would see that transaction size increase to $56 when customers pay with cards. If they make 20 transactions a day, that’s an incremental $120 daily.
3. Faster transfers and improved cash flow
Business owners tell us that they like cash because it gives them more control over when they get paid. Transferring cash happens on their schedule, so they feel that they can better control their cash flow.
But what you may not realise is that credit card processors have made getting paid a whole lot faster. If you accept card payments with Square, for instance, you could see funds in your account within one business day.
4. Happier customers
Buyer sentiment is moving to prefer more digital forms of payment, for speed and ease of use. In a recent Visa study, consumers identified the top benefits of digital payments as: convenience (90%), being able to shop online (88%), ease of tracking spending (83%), time savings compared to cash and cheques (76%) and rewards for using their chosen method of payment (76%).
Another benefit? Accepting cards may show customers that your business is legitimate. If you have logos at your register of all the major cards you accept, it’s likely to instill a sense of trust with people, which will make them happier about purchasing from you.
Bottom line, there are many ways to get paid quickly, in a way that’s simple for your customers. Accepting many different kinds of payment methods helps make sure that you’re a viable option every time for your customers, no matter what they have in their wallet.