Consumer Preference for Credit Cards vs Cash or Checks
When today’s consumers go shopping, they expect convenience. Any obstacle between a customer and the purchase usually leads to the customer taking his business elsewhere. This is as true in brick and mortar establishments as it is in an ecommerce environment. It’s critical to make it as easy and convenient as possible for your customers to make their purchases with your business. In the past, that usually meant asking, “Cash or check?” Those options have given way to credit cards in the minds of most consumers. More than 80 percent of consumers have a credit or debit card, and for many of those shoppers, plastic is the preferred mode of transaction. Merchants that lack the capacity for credit card processing will lose out on sales and customers, as shoppers gravitate toward more convenience at establishments that accept their preferred payment method.
Credit cards are increasingly popular among consumers as a primary transaction method for a number of reasons, the first among which is convenience. With a credit or debit card, the shopper never has to carry cash, never has to worry about exact change, and never has a pocketful of coins jingling around. For many people, having cash on hand requires an extra trip to the bank or ATM, while their credit card never leaves their pocket. Swiping a credit card is faster than writing a check, making it more appealing for many customers. When they do need cash, many credit cards offer cash advances without a fee, and debit card holders can almost always get cash back, making their card the only purchasing tool most consumers need.
Many credit card companies offer incentives and rewards to encourage consumers to use their cards more often for everyday expenses. The lure of airline miles, points toward merchandise or hotel stays, cash rewards, and other programs entice shoppers to use their cards more frequently. Some debit cards offer incentives as well, giving consumers change back for every swipe of their card. Having credit card processing capacity helps merchants attract the business of these frequent shoppers.
Additionally, consumers typically enjoy much more protection on their purchases when they charge merchandise to their credit cards. Extended return policies and warranties, damage and theft protection, and price protection policies are a few of the advantages that shoppers enjoy when they charge their purchases. In addition, the customer has more recourse in the event of card theft or fraud than they would if their cash or checkbook were stolen. If the missing card is reported as soon as possible, a card holder’s liability for fraudulent charges is very limited, making many shoppers feel more secure in using their credit card than in carrying cash or checks.
With credit card processing, the payment goes through immediately, meaning the customer always knows how much credit they have available. This is likewise the case with debit cards; the money is drawn directly from the shopper’s checking account, and the transaction appears promptly on their account record when they check their balance online. Checks, on the other hand, can take weeks to process, leading to a greater possibility of the shopper’s account coming up overdrawn and the merchant losing the cost of the sale while the consumer suffers their bank’s overdraft penalty. Obviously carrying large amounts of cash on hand and transmitting this cash to and from the depository bank has drawbacks in the form of theft.
One of the biggest advantages of credit card processing comes into play when a merchant offers online sales. Using a credit card is one of the easiest and most common ways for a customer to pay. Having any sort of online sales presence all but requires the ability to accept credit transactions. Moreover, accepting credit and debit cards confers an image of professionalism and authenticity to a business, earning customers’ confidence along with sales.
If you are ready to start accepting credit cards and debit cards for your business or are just looking for better pricing or service than your current provider is able to provide, please feel free to contact us for a no obligation quote.