| By Bill Carter, Express Merchant Processing Solutions (EMPS)
Cash is no longer king. The appeal of the check float is sinking. Today’s consumer is embracing the electronic age when it comes to purchasing power. Electronic payments (credit, debit and gift card) are more popular than ever. If you’re not convinced, you should note that for the first time last year, cash and checks accounted for less than half the payments made for in-store purchases. (1)
It’s In The Cards
Entrepreneurs can greatly benefit from this shift to electronic payments by offering their customers fast, convenient and secure payment options. Regardless of industry, electronic payment cards open up new opportunities for small and large businesses. Whether you compete in the retail, restaurant, lodging, medical, or mail/telephone order industry, you should consider the advantages of offering electronic payment options as a way to expand your customer base.
Research indicates companies that accept credit card payments tend to generate higher revenues than those who only accept cash. (2) Entrepreneurs should also not ignore the use of debit cards at the point of sale as it is a fast growing card segment. PIN-secured debit, whereby the consumer enters a personal identification number instead of a signature, is fast, secure and offers consumers the convenience of cash back at the point of sale. In addition, your business will benefit from the lower transaction cost of PIN-secured debit.
“More and more people are using debit cards for purchases…it’s becoming the new cash,” Seth Eisen, Visa spokesman.
Gift Cards: The Small Business Giant
Electronic gift cards are growing. The majority of consumers prefer to give an electronic gift card over cash or paper certificate, and consumers are purchasing more gift cards at higher values. (3) Entrepreneurs offering electronic gift cards have the advantage of increased brand recognition, increased revenue and incremental sales from new customers, reduced fraud/losses from paper programs and easy tracking of sales. In addition, 55 percent of consumers will spend more than the initial value of the gift card. (4)
Check This Out
Smart entrepreneurs should not ignore the check. Despite its declining use, checks at the point of sale are still a popular payment option and accepting them can be done electronically. Providing an electronic check acceptance solution gives your customers one more payment option to use when patronizing your business. Electronic check acceptance is fast for the consumer, safe for the business and greatly helps reduce the processing costs of paper checks.
‘Net Effect
The Internet is not a fad. Home computers are now a point-of-sale device and consumers can shop your products right from their living room. According to America Online, shoppers plan on spending over half their holiday budget on the Web. Forrester Research reports online holiday retail sales will increase by 20 percent over 2003. This is not just a holiday trend, it’s taking place throughout the year.
When you expand your business to the Internet, you are expanding your opportunities on a global scale. By offering a flexible, user-friendly payment process, you will have access to more than 812 million potential customers. (5)
As you seek electronic payment solutions to help grow your business, carefully study your options. There are many providers of merchant services, but only a few will take the time understand your business and design a program that is tailored to your specific needs and the needs of your customers.
Article footnotes:
1) Akron Beacon Journal, 11/22/04. Study completed by American Bankers Association and Dove Consulting Group.
2) Forrester Research, Online Retailer Info Report, April 2003.
3) 2004 Consumer Insights Survey by ValueLink.
4) 2004 Consumer Insights Survey by ValueLink.
5) Internet World Stats at http://www.internetworldstats.com/stats.htm.
This article was provided by Express Merchant Processing Solutions (EMPS). EMPS, powered by First Data Corp., offers a comprehensive line of payment processing solutions. The mission of EMPS is to help business owners achieve their goals by delivering the right mix of products and services to increase customer demand. For more information, please visit www.empsebiz.com.
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