Why Some Small Businesses Don’t Accept Credit Cards
Credit cards are everywhere, but in some small businesses, you won’t see customers reaching for their cards to pay. This is because some businesses simply don’t accept credit cards. We’re going to explain why some businesses don’t accept credit cards and why these businesses should consider adding credit card processing if possible. If your small business doesn’t currently accept credit cards as payment, make sure you consider the benefits you could start enjoying when you take down the “cash only” sign.
Reasons Some Small Businesses Don’t Accept Credit Cards
It’s no secret that customers love swiping a card instead of dealing with cash, so why don’t small businesses accept credit cards in some cases? A few possible reasons can keep some small businesses from accepting cards as payments.
1. Cash-Carrying Culture
One reason some businesses remain cash-only, is because they’re situated in an area where people are used to carrying cash. This tends to be the case in densely populated areas like New York City. When there are enough street vendors and small businesses around that only accept cash, customers are less likely to be surprised or frustrated by a company’s inability to take credit cards, and they’re more likely to carry cash so they can make purchases at these businesses.
2. Poor Internet Connection
Since credit card processing requires an internet connection, small businesses that don’t have internet access can’t accept credit cards. According to the Federal Communications Commission (FCC), at the end of 2017, 21.3 million Americans still didn’t have access to connections of at least 25 Mbps/3 Mbps. This problem tends to affect people and businesses in rural areas. Fortunately, more and more parts of the country are gaining access to broadband internet connections each year.
3. Lack of Familiarity
For some business owners who are used to doing things the old fashioned way with cash and checks, the idea of accepting credit cards may be intimidating. It’s more comfortable to stick to what you know, especially if your business seems to be doing okay as it is. If a business owner is unfamiliar with terms like “merchant services provider,” “interchange fees” or “EMV technology,” they may feel overwhelmed by this unfamiliar territory.
4. Equipment Cost
Another reason why places don’t accept credit cards is because they don’t have the necessary equipment. To accept credit cards, you need a card reader — a newer one that can process EMV payments if at all possible. In most cases, getting a credit card reader comes at a cost, which may discourage some business owners from adding card readers to their business. With NRS Pay, however, you can get an EMV card reader for free.
5. Processing Fees
Perhaps one of the biggest deterrents to accepting credit cards is that every time you process a credit card payment, a portion of the sale goes to paying processing fees. Especially if a business owner hasn’t found a rate they are comfortable with, they may choose to avoid the issue altogether by sticking to cash only. Credit card processing fees can eat into profits when they’re over-inflated, but NRS Pay offers competitive rates and ways to help you keep processing costs to a minimum.
Benefits to Small Businesses of Accepting Credit Cards
Should a small business accept credit cards? Despite the potential reasons not to, there are many reasons why small businesses should accept credit cards if at all possible. Overall, accepting credit cards can help you please customers and grow your business. Let’s look more closely at some of the benefits of expanding to accept credit cards instead of just cash or checks:
1. Appeal to More Customers
The first reason every business should consider accepting credit cards is because you can pull in more customers this way. Only 53% of Americans say they always try to have some cash on hand to make purchases. That means many customers will leave your business if they see a “cash only” sign. You may even have an ATM on-site, which can help, but some people still won’t want to deal with the inconvenience or possible fees that come with using an ATM.
2. Encourage Larger Transactions
Even people who carry cash with them are likely to have less than $50 on hand. This limits how much they can spend at your business. Even if they have hundreds of dollars in their wallet, they might be more reluctant to spend it than they would be to spend the same amount using a credit card. Studies demonstrate that people are in a bigger spending mode when they can pay with a credit card. This means you could increase your average ticket size and increase profits.
3. Enjoy More Convenient Accounting
Customers enjoy the convenience of paying with credit cards and the automatic record of their spending. Merchants can also enjoy this convenience. When customers pay with credit cards, it can make bookkeeping easier, particularly if you have a modern point of sale (POS) system to help. When accepting credit cards means you do away with accepting checks, you can avoid the problem of bounced checks. With credit cards, you know instantly whether the customer can pay, and the funds are transferred into your account in a timely manner.
4. Keep Your Assets Safe
Cash-only businesses can be targets of theft since criminals know you’re likely to have a lot of money in your cash drawer. Having a heavy-duty, secure cash drawer can help, but in some cases, employees may feel pressured to hand over cash to protect their own safety and the safety of anyone else in the store. In these situations, you could suffer much bigger losses when the cash in your drawer represents all of your earnings from the day, as opposed to a fraction of your sales transactions.
5. Make Your Business Appear More Professional
Finally, as more people are used to businesses accepting credit cards, you run the risk of appearing unprofessional or illegitimate if you don’t accept cards. On the other hand, by accepting credit cards, you can make your business appear more professional and trustworthy. While you’re at it, boost your professionalism by installing modern POS equipment. Creating a professional checkout experience is important if you want customers to make a purchase in the first place and keep coming back.
Start Accepting Credit Cards at Your Small Business
If you relate to being intimidated by the idea of accepting credit cards or overwhelmed by everything you need to learn, National Retail Solutions (NRS) is here to help. Our mission is to help small businesses thrive. Our blog is full of resources on how credit card processing works, how to keep processing fees low and other helpful topics related to credit card processing.
If you’re ready to start reaping the benefits of taking credit cards, make NRS Pay your merchant services provider. When you use NRS for small business credit card processing, you’ll get a free EMV card reader to process cards, and you’ll enjoy exceptionally low processing rates. It’s time to ditch the “cash only” sign and increase your profits.
National Retail Solutions offers an all-in-one Point of Sale bundle complete with heavy duty hardware and an easy to use software interface.Ask for a quote to learn how much our systems cost.Buy now to get a competitive advantage in your market.