It is a mistake to take one look at merchant account providers and decide accepting credit cards is “too much trouble” or “too complicated” for your business. Fewer and fewer people carry physical money in their pockets on a daily basis. Swiping a credit card has long been seen as more convenient by consumers, and statistics show credit card use results in larger purchases at the point of sale.
However, if that level of convenience was associated with a little plastic card, the widespread popularity of smartphones and the payment technologies associated with them is rapidly elevating buyer convenience to higher and more interactive levels.
Not Just Convenience But Security
Research on consumer behavior with physical credit cards has proven that people tend to buy 2.5 times more goods or services when using their cards rather than actual currency. In part, this has always been due to the perception of a larger degree of security. Once cash is passed from one hand to another, it’s harder to get refunds if something goes awry with the purchase. The ability to more accurately track purchases, and to dispute payments makes credit cards the preferred model for many.
The epidemic of identity theft in recent years has led to sporadic resurgence in the use of “cash on the barrelhead,” but for the most part a technological race has ensued, with payment technologies evolving as fast as possible to outpace the thieves. In Europe, the widespread adoption of cards with embedded chips has made secure transactions a reality again, and slowly those cards are being adopted in the U.S.
The major advantage of the chip cards is that they process single transaction data that cannot be used for a second purchase. Taken in tandem with NFC or near-field communications, this same level of processing has become a reality on the now ubiquitous smartphones that never seem to leave their user’s hands. With an NFC enabled consumer device and merchant terminal, payment could be as simple as waving the phone in the direction of the terminal.
New Payment Technologies Allow for Greater Customer Interaction
More intriguing, however, are the options these new payment technologies hand to the merchant to interact with customers in the form of coupons, incentives, and loyalty rewards. Additionally, social networking via Facebook, Twitter, and various “check in” services has become a valuable and virtually free form of advertising for merchants. And, of course, the ability to use the same technologies to accept online payments is now more a matter of business necessity than an option.
Simply put, the main reason any business should accept credit cards is the fact that in the 21st century, technology is inescapable. In a purely practical sense, accepting credit cards also increases the merchant’s own ability to maintain financial records, and new mobile processing options make it possible to accept payment virtually anywhere.
A large part of running a successful business lies in giving the customer what he wants, and customers want to be able to pay electronically — whether that be online or at a physical point of sale with a chip-based card or an NFC enabled smartphone. Businesses that lag behind in accepting these new payment models will increasingly lag behind in sales as well.