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.