Nowadays, everything from the online craft fair vendor to the food truck accepts credit card and electronic payments. This is due to the technological advancements over the past 5 years, which have made it easier to process different types of payments.
With card readers coming in all shapes and sizes, small businesses have unprecedented access to this technology. Yet despite this, and despite the fact that card processing can increase revenue, 55% of US based small businesses do not yet accept credit cards.
However, as it becomes more and more obvious that customers and clients prefer credit cards and ePayments over cash, businesses will have no choice but to adapt. In fact, according to some projections point-of-sale cash payments will have shrunk by 10% between 2012 and 2019, while the rest of the payment economy will have grown over 11% over the same 5 year period.
Furthermore, cash is not the only form of payment in decline. According to the Federal Reserve, check usage in the US has fallen by more than 50% since the year 2000, and this fall is projected to continue in the future. Simply put, businesses prefer faster and safer ways to process outgoing and incoming payments.
The new wave
This shift could be considered a veritable revolution, as some European governments, such as the one in Denmark, are making it legal for businesses to refuse cash payments, due to the high security and handling costs associated with this method of payment. In the US, the switch from cash to cards and electronic payments is best seen in startups such as Uber, which does not accept cash payments, and yet has still been a rapidly growing company valued at over $50 billion.
By accepting payments exclusively through credit cards and other electronic means, Uber is able to better track business performance and cut out the operations that would be necessary to secure, manage and transport cash. This is also possible due to the nature of Uber’s core market, 69% of which say they would not buy from a business if it did not accept electronic payments or credit cards.
Small business owners and the cashless revolution
For small business owners, this shift in payment methods indicates that it’s time to adapt. The benefits of accepting credit cards and ePayments outweigh the costs in most cases. Of course, some businesses will remain cash and check only due to the nature of their operations.
But, for the most part, businesses stand to gain from making the transfer. According to the Federal Reserve, customers prefer to pay with cards or electronically if their bill exceeds 20 dollars, and higher income households are less likely to use cash for payments. In fact, high income households use their credit cards for over 40% of their monthly transactions. As such, the options for expanding into a higher paying market is there for small businesses.
For more information on how to start accepting credit cards and ePayments, or to sign up for a merchant account, please call (888) 924-2743 or go to Charge.com.