Should Your Small Business Accept Credit Cards – The Importance of Giving Customers Multiple Payment Options
Small and medium sized businesses are faced with their own unique set of hurdles and obstacles. These issues and problems are often driven by budgetary restraints since they are working on a much smaller budget to begin with. Perhaps you’ve been mulling over the thought of installing a credit card machine in your business to offer customers the option to use credit cards. Is it worth getting one of these merchant machines? Will it help you to draw in more customers? Will it make a difference in their spending habits? The answers may come as a bit of surprise for you, and help to make your decision that much clearer.
Let Them Collect Loyalty Awards
There's no question about it, offering your customers multiple payment options is bound to work in your favor. Nowadays many customers have loyalty points tied to their credit cards, so they are actually getting something out of the purchase when they are using a credit card. Not only will they get the product or service they have paid for, but they can earn travel rewards, cash back, and other types of rewards.
For many customers who collect these types of rewards, they will go out of their way to frequent stores, restaurants, and services that allow them to use their loyalty card and earn points.
Allow Them to Pick Their Preferred Method of Payment
Of course, another pro to offering credit cards as an accepted form of payment is the fact you are giving customers the option to choose their preferred method of payment. Some may not have the cash they need at that moment, or they just prefer to use a credit card for other reasons. If you don’t offer this option, they may be forced to take their business elsewhere.
Take any small retailer, or even a local pub. While the customer may not have enough cash on them, and they don’t want to pay a service charge on using their debit card, a credit card may be the perfect choice for them.
Accepting Credit Cards Can Result in Higher Sales
This particular pro is tied to the preferred method of payment. Again, you can take a look at a business such as a clothing retailer. Often a customer will be inclined to purchase more items, and thereby spend more money, if their preferred method of payment is offered. Rather than putting that purse back on the shelf, or that pair of shoes back on the rack, they can go ahead and make the purchase with their credit card.
Help to Legitimize Your Company
When you think about those retailers, restaurants, and services that only accept cash you can't help but let it reflect on the business itself. It has been shown that by offering credit cards as a form of payment you will in fact be working to legitimize your business. This can go a long way where your branding and sales are concerned. If you’re in the process of expanding your customer base, this can help you do it.
Take Advantage of Merchant Cash Advance
While there is a lot of focus given to the customer and their spending habits, there is also another side to accepting credit card payments. A merchant cash advance is something that many small businesses end up taking advantage of. This is a great way for business owners to get access to cash quickly. It's meant to be a short-term solution for their capital needs.
Many look at this as a loan, but it's not a loan at all. A merchant cash advance is just that, a cash advance that is based on the credit card sales you normally receive. If a business needs access to this cash they simply apply for the cash advance. The approval process is very quick and the money is deposited into the account equally as fast.
These cash advance providers will take a look at the typical daily sales made by credit card. Obviously, this means you need to be offering credit card as form of payment or else you can't qualify for this option. What’s great is that this process moves along much faster than a traditional loan, which is great if you need the cash fast. As long as you are approved, then you will make arrangements regarding the terms of the advance, how much you will pay back, and when.
Some of the more common reasons small businesses choose to use this route include needing cash for marketing, purchasing inventory at a discounted price, or needing short-term capital.
Making Your Customers Happy
At the end of the day it’s your job as a retailer or service provider to make your customers happy, no matter how small your business may be. Offering them a variety of accepted payment methods can certainly achieve that.