In our culture of convenience, we have gravitated towards making everything we do easier. Email made letter-writing faster 20 years ago (and still does today) and text messaging eliminates the need to call someone to impart a few quick words. The same trend is seen in other areas of life, such as the ability for credit card payments instead of cash. Aside from the convenience factor, the ease of credit card processing has come with additional benefits as well. Businesses that accept credit reap the rewards every day and may be better off than their cash-only counterparts.
Customer Behavior: Credit vs. Cash-Only
There are numerous benefits of both using and accepting credit card payments. A few notable differences between credit and cash-only buyer behavior are apparent, however.
Increased Spending – The average cash purchase comes in at about $17. The differences between this and credit card purchases are exponential, as plastic payers spend an average of $66 per purchase. On the whole, credit card customers spend 2 ½ time more money than cash-carriers, making larger purchases that are as simple as upsizing their meal at a fast food restaurant.
More Frequent Purchases – Because credit cards afford shoppers more flexibility, they go out and buy items as soon as they need them. Conversely, cash-only shoppers buy when their wallets are full—paydays and holidays.
Extraneous Purchases – Businesses that receive credit and debit card payments, as opposed to cash-only establishments, reap the benefits of unintended purchases. Because credit card payers are not confined to what they have in their wallets, these buyers frequently purchase items on impulse—like that cute pair of shoes that are on sale.
Greater Loyalty – Research on customer behavior suggests that payment options have a relationship to customer loyalty. Customers who had the freedom to pay with (and therefore spend more) with their credit card are more likely to shop at an establishment again.
Additional Credit Perks for Businesses
Knowing how varied payment options affect consumer behavior, you may wonder how this translates to benefits for your business. Indeed, merchants experience a number of advantages when incorporating credit card payments into their business model.
Larger Customer Base – The willingness to accept credit at your business means increasing your reach. Flexible payment options meet the needs of customers no matter if they prefer to pay with cash or card.
Enhanced Security – In accepting credit, more of your customer base will probably pay this way, which results in a smaller amount of cash in the register which is susceptible to theft. Additionally, credit card companies and processors offer payment protection that benefits both the merchant and the cardholder in terms of payment guarantees and fraud protection. The American Bar Association even says that it’s a good idea to make and receive credit card payments, calling it the safest payment method.
Streamlined Finances – Cash payments result in large quantities of individual receipts. Credit, on the other hand, may be tabulated in a long list, making calculations easier and faster each business day. Your business also avoids extra trips to the bank to deposit funds.
Credit cards have made purchases easier for consumers, resulted in higher spending, and brought more business to companies. Observing these facts and others shows just how obvious it is that the credit and cash payment model results in greater success for businesses across all industries. Expand your potential—incorporate credit payments into your business model today!