If you’re a business that supplies goods and services to other businesses, you may want to reconsider accepting credit cards. In this post, we will cover the advantages of credit cards. Did you know that when you accept credit cards, it provides you with a significant financial benefit over any other payment method? For as long as I can remember, most suppliers like to do the net 30- or net 60-day repayment plan. This is where the customer has 30 days, 60 days, or sometimes even 90 days to repay. But when you accept credit cards, you will experience a faster pay back rate than a net 30 term could ever offer. Suppliers currently have an incomplete view of card acceptance benefits. Some suppliers admit that they do not accept credit cards as the primary source of payment primarily because it might be inappropriate to ask a customer for a credit card payment over net 30 billing cycle. This is the most common way suppliers and customers are accustomed to.
A Kaiser Study on the Advantages of Credit Cards
There was a study done by MasterCard and Kaiser Associates on Commercial Card Acceptance Cost Benefit indicating that when you take credit cards you experience a much faster pay back rate than net 30 day terms. If you still are thinking that taking credit cards is not for you, let me show you a few reasons for credit card acceptance.
- Customer Demand (Mentioned by 73% of Accepting Suppliers): Providing Buyers with the option of paying quickly and easily was the most prevalent reason to accept cards. While revenue-side benefits weren’t explored in this study, Suppliers are clearly acting on the belief that providing a more convenient and desirable payment option to buyers induces incremental buying.
- Quick Cash (Mentioned by 57% of Accepting Suppliers): Accepting cards at the point of sale eliminates two timely and costly processes in the Order-to-Cash cycle – invoice production and buyer credit extension. Streamlining this cycle by eliminating these processes provides significant Supplier-side benefits.
- Bad Debt Reduction (Mentioned by 27% of Accepting Suppliers): In addition to the benefits associated with shortening the Order-to-Cash cycle, charging Buyers at the point of sale via card reduces the amount of trade credit extended to the Supplier’s customer base, and consequently reduces the incidence of non-payment. Though 27% of interviewees cited this as a driver of card acceptance – none had quantified the effect of card on bad debt expense reduction.
- Automation (Mentioned by 14% of Accepting Suppliers): Reducing paper and labor at Supplier organizations was noted as a sizable benefit resulting from card acceptance.
The Kaiser Study has shown that there is a 37% increase on bill collection when accepting cards over other collection methods for a typical mid-market supplier in which the average charge is $500 dollars.
Choose the Right POS System and Start Reaping the Advantages of Credit Cards
When selecting a Point-of-Sale (POS) system to accept credit cards, it is crucial to consider key factors that ensure secure and efficient transactions. The system should support the necessary payment processing options, including credit and debit cards, mobile wallets, and gift cards. Additionally, the system should be PCI compliant and use secure payment processing, including encryption and tokenization, to protect sensitive customer information.
The POS system should be compatible with existing hardware and integration with other tools pertaining to inventory management and customer relationship management. The user-friendliness of the system, the quality of customer support offered, as well as upfront costs and ongoing fees should also be considered.
Last but not least, scalability for future growth is an important factor to consider. By evaluating these factors, you can select a POS system that meets your business needs and provides secure and efficient payment experiences for all valued customers.
Contact a United Banc Card of TN, LLC sales representative at 615-476-0255 to discover more opportunities to accepting credit cards today! United Banc Card of TN, LLC supplies affordable point-of-sale systems and merchant services throughout Tennessee for clients in the restaurant hospitality, retail, QSR and delivery, convenience store, and liquor store industries.