Research Confirms Higher Earnings
When merchant service representatives approach some business owners, they meet with objection. The owner may feel that his current way of processing transactions is a better way. After all, he has been using this system since he first opened his business. Why should he change?
While this may be true, in reality, studies have shown that accepting credit cards increases profits. Paulson says that, “Studies by Dun and Bradstreet have shown that when customers purchase products or services with credit cards or debit cards, they will spend 12-18% more money.” We are living in the age of plastic and people are carrying cash less and less.
Customers Prefer Choices in Payment Methods
Accepting credit cards for sales transactions serves to give the customer another choice in payment besides cash and checks. When customers have a choice in payment methods, it “attracts new customers, increases revenue, and enhances customer retention” according to First Data. The business owner may attract new customers who prefer to pay in credit cards, but he will retain the old customers who prefer to pay in cash or credit. As a result, revenue increases.
When asked whether a dry cleaning customer preferred paying in cash or credit cards, he answered that he preferred to pay with credit cards, but since the owner did not accept credit cards, he paid in cash. The owner retained the customer, but she may have lost out on additional sales. He would probably bring more than several dirty shirts at-a-time, if he could pay with credit.
Consumer Spending Despite Banking Crisis
Despite the state of the economy, consumers in Europe continue to spend money, even while prices are increasing. While the collapse of the subprime mortgage market has affected the European market in the case of increases in consumer credit card rates, consumers are opting to shop around for lower rates, rather than not use the credit cards at all. If credit cards were not available, consumers would not spend money.
Sean Gardner, director of MoneyExpert.com, stated that “Customers paying higher rates on debts should review their credit card as a matter of urgency and switch.” European consumers are able to find banks who are offering 0% interest on consumer credit cards and the competition is very heavy. Anyone doing a global business will find ample opportunities to make money in Europe today.
In conclusion, accepting credit cards as a form of payment will offer more opportunities for the business owner to increase his profits, retain his customers while attracting new customers.
 |
