Some new startup businesses avoid accepting credit and debit card payments when they first begin operations. Research suggests that it is the costs associated with accepting cards using Chip and PIN machines that cause trepidation in entrepreneurs. They believe that the operational costs outweigh the immediate benefits to the business. However, there are a number of significant advantages to a business to include credit and debit cards in their payment options for customers, as outlined below:
1. Competitive Advantage
In the current economic climate it is essential to remain competitive. Start-up businesses have a particularly tough task of building a strong customer base without a known brand behind them, and therefore must offer the same flexibility and options as their competitors.
Who are your main competitors? If you are competing against other startups or SMEs, accepting cards will give you an edge if the competition is accepting only cash and checks. And if you are competing against larger, established brands, it is essential to offer all possible methods of payment, because these competitors will already be offering their customers the ability to pay via credit and debit cards.
2. Greater Flexibility for Your Customers
Shoppers are always expecting their buying experience to be as convenient as possible, and so merchants must do their utmost to be flexible in aspects of the business. This applies to the way that merchants allow their customers to pay for their goods.
If a customer simply does not have the cash available, then they will expect to be offered an alternative method of payment. If the merchant cannot provide this alternative, the customer will be unable to make their purchase and the sale will be lost to a competitor that accommodates the customer's payment needs.
3. Opportunity to Up-Sell
Customers may come into your store with one purchase in mind, but then decide to make an impulse purchase while in the store. However, if they have only enough cash to make the initial purchase, this opportunity will be lost.
With the ability to purchase goods and services using their credit or debit card, shoppers can spend freely rather than be limited by the cash in their pocket.
4. Faster Reconciliations
Allowing customers to make purchases with their credit or debit card means that there is less cash in the cash register at the end of the day, making your reconciliations faster and easier. This also means that there is less room for human error, as the calculations are done by the terminal or your point-of-sale system.
5. Improved Security
It is impossible to ignore security issues when starting up a new business. Accepting card payments means that there is less cash held on-site, which keeps your money safe from theft.
While implementing card payments may appear to be an unnecessary addition to the stress of setting up a new business, the advantages are multifaceted and will provide long-term benefits that will help accelerate the success of your business.