Cash is decreasing
The general trend of payments is one that is moving away from cheques and cash and towards electronic payments like credit and debit cards. 90% of Canadian consumer spend is cashless. Cash is still around and used but it’s being rapidly replaced by credit and debit cards in terms of consumer preference.
Credit and debit cards is increasing
Credit cards have paved the way for mobile payments, like Apple Pay, and online shopping to proliferate. Retail eCommerce sales in Canada totaled $25.37 billion in 2014. As the shopping experience becomes increasingly friction-free, convenient, and personalized, credit cards will continue to rise in popularity.
Think of your customer
Consider the shopping experience if your credit card-wielding customer had to go to an ATM to withdraw cash because your business did not accept credit cards. There’s a high chance that customer will go where their credit card is accepted. With 89% of Canadian adults owning at least one credit card, many of your potential customers may have the same experience if you don’t accept credit cards.
Whether it’s simply more convenient or they want to reap benefits like points or rewards, more and more consumers prefer to use credit cards. Consumers will expect to be able to pay with their credit card wherever they go and will gravitate the businesses that accept them.
Think of your competition
In a CFIB survey,
- 90% of businesses in the retail and hospitality sector said they accepted credit cards
- 93% of businesses said they took debit cards
- 73% of businesses were set up to take credit cards
- 59% of businesses could handle debit cards.
Businesses that do not accept credit cards will need a loyal clientele to continue operating in a cash-only fashion. As consumers become more educated and familiar with electronic payments, you could risk losing business and profits to your competitors who are adapting to the changing payment landscape.
While accepting credit cards comes with a cost, you may be losing more money by not accepting them. With $127 billion added to the economy through card usage between 2008-2012, one thing is clear: you’re losing sales.
The lost opportunities among cash-only merchants are great. According to Intuit, “by not accepting cards, 15 million businesses are missing out on $100 billion in sales annually – roughly $7000 per company a year in either new sales or sales that go to competitors that do accept cards”.
There are many benefits to accepting credit cards; you’ll increase your sales and make customers happier. The average spend per transaction is 120% higher when customers pay with credit cards compared to cash. The higher your average ticket, the more sense it makes for you to accept credit cards because few people are going to be carrying that much cash around on their person.