s Your Retail, Hotel or Restaurant Business Cash Only? You Could Be Missing out on Some Serious Profits

If you operate your retail shop, hotel, or restaurant business on a cash-only basis, you are probably missing out on a lot of customers, which means you are missing out on major profits as well. Many people today just do not carry cash any more, preferring to do most or all of their business and shopping by credit or debit card. This is especially true of people who are travelling—they feel more secure carrying a couple of credit cards than a wallet full of cash. After all, most credit cards offer a liability limit that protects the customer if his or her credit card is lost or stolen. If cash is lost or stolen…it’s simply gone.

As a result of this ever growing customer preference for credit cards, any business that does accept credit cards will find that they enjoy a lot of benefits, too. These benefits include: customer loyalty, impulse buys, customer willingness to upgrade purchases, ease of checkout at the cash register, and more. One the most important benefit is proven by several studies - people who shop with credit cards generally spend more than three times the amount of money than people who shop with cash. That alone can equal serious profit to a small business.

Of course, there are costs involved in accepting credit cards, which is a major reason that many businesses—especially small ones—have resisted implementing this payment option for their customers. Credit card companies charge a fee in the form of a small percentage of each transaction, which adds to the overhead of running the business and cuts into sometimes slim profit margins. But that small fee could be more than recaptured in the form of more business, an easing of cash flow, and higher profits in general.

You also may have resisted offering credit card convenience because you’ve heard that setting up a merchant account is time consuming and complicated. Not these days. Such things are simpler than ever before, and a merchant account or an online credit card processing account could be the key to not only providing your customers with the payment options that they want, but also to simplifying your payment capture processes.

So what is a merchant account? Simply put, it is an intermediary between the customer’s credit card account and your business bank account. It is an agreement between a business, a merchant bank and a payment processor that allows that business to accept credit cards, verify they are valid, and process the payment. The verification and processing portion can be done in real time or in deferred time, usually a day or two. Either way, the business is assured swifter access to their customers’ funds than ever before.

An added benefit of using a merchant account for your business is that you don’t have to deal with each of the major credit card companies separately. Since they each have different processing and file type requirements, this could be a headache for a small business that doesn’t have a talented IT staff. The payment processor that acts as the intermediary handles all that coding, testing, and processing for you. In fact, many of them have created business-specific types of processing that can be almost instantly implemented. They will require a file extraction—simple enough for most businesses to handle—and then they will handle the exchange of information with the specific credit card companies and your bank.

An online credit card processing account works as simply. A third party is responsible for verifying a customer’s credit card information and for accessing the funds. Then the processor transfers the funds—minus their small fee—into your bank account. This type of credit card processing takes a little longer to set up, however, and is more appropriate for an online business than for a retail, hotel, or restaurant.

Using a merchant account or any kind of online credit card processing account can really simplify the life of a business owner or his accounting staff. These types of accounts offer a safe method of verifying, accepting, and transferring funds directly from a customer’s credit card into your business bank account. They allow quicker access to your sales receipts, increase the purchasing power of your customers—and thereby their purchasing habits—and improve the cash flow of your business. Many merchant accounts also offer their business clients with reporting options, allowing them to track sales more efficiently. Many of them offer credit card terminals and other hardware or software needed to perform the transactions—at no cost to your business.

Every day that your business does not accept credit cards is a day that you are potentially losing money. Do a little research and you will find that the ability to accept credit cards will make your business—and therefore your personal—life more profitable. Whether you operate a restaurant, retail establishment, hotel or any other type of business, you can stay strong and competitive for years to come by accepting credit cards.