May 22, 2024

Business Bib

Business & Finance Blog

How Accepting Credit Cards Can Improve Your Business

3 min read

Credit cards are nothing new today. It feels like they’ve been around for centuries and pretty much everyone is at least acquainted with them, if they are not avid users already. According to Visa, one in three purchases are made using credit cards today, and that number is ever increasing. Yet, many small businesses choose to accept only hard cash as the only method of payment. I will give you some reasons why you should not follow the same line of thinking.

Allows online salesbusiness

It’s not that it is impossible to purchase things online without a credit card, but it is generally much easier for both the customers and the business itself that those transactions are done through a credit card. Online sales are what drives businesses forward these days, as it allows purchases around the clock, something that your brick-and-mortar store cannot do without incurring massive overhead costs.

Also, an online store removes the location limits for your customer base, and it makes it a lot easier for the customers to find you, browse through your items for sale and, finally, make a purchase –  all of this from the comfort of their homes.

People find it easier to spend with credit cards

There have been numerous studies about this. So many, in fact, that this has become somewhat of an axiom today. The reason for this is a psychological one – it is much easier to spend virtual money than hard cash because you cannot actually see the physical amount of money that you are spending. This way, people are more open to impulse buys (something that is extremely important for online sales, for example), meaning that they will spend more money with you, if the offer is right.

So, if you accept credit cards, someone who has stumbled upon your website can make a purchase there and then, without having time to think it over. While this is not good for the customer, it is definitely good for the business.

It solidifies your cash flowbusiness

Cashflow is vital for any business, of course. There’s no point in running a business if you can’t meet all your payments at the end of the month. This can sometimes be because not enough profit has been made, but it can also be because the transactions that you’ve made have not yet been cleared and money has not been deposited into your bank account yet. With credit cards, this is made a bit simpler.

The money goes straight from the customer’s bank account to your bank account and these sales are usually cleared in a day or two. This makes planning much easier, especially in the long run, as you don’t have to make different calculations each day, based on the current state of your bank account and the incoming payments.

Allows you to widen your customer base

Just by starting online sales, your customer base will have widened significantly. There are also customers who prefer to shop only with credit cards, even when entering a physical store. Imagine having customers ready to spend, they’ve chosen what they want to buy, only to be driven away by the impossibility to pay for the things with a credit card.

Also, not all credit card processors work with all credit card types, so be sure to check credit card processing company ratings and shop around to see which one accepts the most types. The more types, the merrier, as not everyone uses Visa or MasterCard.

The importance of credit cards for today’s businesses cannot be overstated. They are the future (and the present) of trading and retail and they make things easier for everyone. The things I’ve mentioned above are just some reasons as to why you should go for accepting credit cards, but, there are also numerous other reasons which you can find out for yourself, if you wish.