When consumers go shopping at a brick-and-mortar store, they are increasingly turning to credit cards to pay for their purchases. Consumers are also flocking to online retailers for buying everyday needs as well as luxury items. In today’s electronic age, cold hard cash is no longer king. Acceptance of credit cards for payment of goods and services is key to the financial success of small businesses.
Personal finance researchers have found that consumers spend greater amounts of money when paying for their purchase with a credit card. These days, few people want to walk around carrying hundreds of dollars in cash. There’s the risk of losing the money, having a pickpocket snatch the wallet, or not having enough cash on hand for everything the customer wants to purchase. Using credit cards to pay for purchases allows the consumer greater flexibility related to their purchase amounts. For small business owners, this can lead to greater revenue and profits.
Credit card issuers offer a wide range of convenience options to cardholders. Purchases made with a credit card are afforded extra protection in case of damage or breakage. Card issuers also offer price guarantees, product warranties, and price protection. Consumers can also easily track their spending through their credit card statements. Tracking spending may be more difficult with cash. Using credit cards also means that consumers don’t have to visit ATMs to withdraw cash to make their purchases. ATM fees can make a significant dent in a consumer’s budget while credit card fees can be minimized by the consumer by paying their monthly balance in full.
When a consumer uses a credit card, they are building their credit history at the same time. Many credit cards offer cardholder rewards such as frequent flier miles, cash back or reward points for gift certificates, coupons, and other rewards. Merchants who choose to accept credit card payments may enjoy greater confidence from their customers, an increased array of shoppers, and merchant account discounts on credit card processing and transaction fees.
Credit cards are fast and convenient for both retailers and consumers. They offer fraud protection for the merchant as well as the cardholder. Direct credit card payments allow small businesses to expand their customer base and initiate an online marketplace for their goods and services. Small businesses who accept payments from the most popular credit card companies have a good chance of growing their clientele and their revenue.