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Businesses increase profits by accepting credit cards and debit cards
June 18, 2012 - 2:12pm
By giving customers the option of paying with credit cards and debit cards, businesses not only please their customers by providing more convenience, but also likely increase the amount they spend at each sale. Numerous studies have shown that people who make payments with plastic tend to spend more per purchase than those who pay in cash. For businesses, being able to accept credit cards is integral in the quest to maximize profits.
"Cash really, when you fork it over across the counter, parting with it is just a more vivid sensation than the abstract of signing a pledge to pay it at some point in the future," Cornell Economics professor Robert Frank told NPR.
Not only does this allow customers to buy something that they might ordinarily not, but it also encourages them to buy more at each transaction. Throwing in an extra impulse purchase, for example, with an order is much likelier for a customer paying with credit or debit, the news source reports.
Businesses without credit card processing stand at a substantial disadvantage in terms of attracting, retaining and maximizing profits from customers. Limiting customers to cash or cheque can take money away from your business.
Furthermore, giving customers the ability to pay however they choose increases their ability to receive rewards or bonuses from their credit card provider, meaning they could switch to a competitor who affords them this opportunity. The opportunity of receiving perks from credit cards often plays a significant role in a consumer's decision of where to shop.
By having a pos terminal that accepts credit and debit, a business is taking a big step toward building customer loyalty, attracting impulse purchases and increasing the amount of their average purchase.