How Accepting Credit Cards Can Increase Sales And Revenue
by Scott Burke
Published on this site: February 11th, 2006 - See
more articles from this month
Accepting credit cards is becoming a must for entrepreneurs
and small businesses in today's business environment. There
are numerous social, demographic and technological factors
combining to make plastic the payment form of choice for increasing
numbers of people.
By the Numbers
The average American cardholder has roughly four bank credit
cards. Credit card purchase volume has been expanding about
15 percent per year for the last five years, or three times
faster than the increase in overall U.S. purchases.Debit card
purchases are growing even faster, at more than 50 percent
per year. Credit and debit cards are expected to account for 33 percent of
all purchases by next year and for 43 percent by 2005. According
to one estimate, businesses forfeit up to 80 percent of consumer
impulse buys if they don't accept credit cards.
Why People Use Credit Cards
To understand the growth in credit card use, it's important
to grasp the reasons for their popularity. Consumers typically
use cards because:
- They don't want to carry cash
- They want to save cash in hand
- They want to gain loyalty points (such as airline miles)
- They are making a large purchase
- They are looking to float money in a bank account
- They are making a reimbursable purchase for a company
Plastic on the Internet
Even as credit card use grows in the real world, plastic
already dominates the world of Web shopping. This breakdown
of how people pay for online purchases demonstrates that credit
cards are the key to e-commerce:
- Credit card online - 85%
- Check mailed - 10%
- Credit card via phone - 2%
- Credit card via mail - 1%
The Business-to-Business Opportunity
It's becoming increasingly clear that credit cards are also
playing a greater and greater role in business-to-business
transactions. For example, visa is bundling credit and cash
management products for small businesses under the umbrella
of the Visa Business Card.
Larger companies are also streamlining their buying processes
using so-called business cards for indirect purchasing. Each
business card transaction shaves a reported $50 to $100 in
purchasing costs. That's something to keep in mind if your
company works with large companies.
The Future of Plastic
Market research indicates that consumers view credit cards
as lifestyle enhancers that contribute to other areas of interest
in their lives. And credit card products now in development,
such as the "electronic purse" and online debit
cards, promise to further extend the use of credit cards.
It all adds up to bad news for checks. Paying with plastic
is becoming increasingly popular for even routine bills such
as gas and electricity. And younger customers' preference
for plastic cards is even more pronounced. These trends are
projected to cause check and paper credit use to fall from
32 percent of all non-cash transactions in 1997 to just 14
percent by 2007.
For more information on how your business may benefit from
accepting credit cards now. Click over to http://www.cmscreditcards.com
Scott Burke; President of iMAX Business Solutions in charge
of sales, strategy, and execution and thus is responsible
for managing all aspects of the company's marketing, communications,
new accounts, and support.[email protected]
http://www.cmscreditcards.com/
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