Consumers becoming cash free; plastic preferences up
August 09, 2013

With technological advances have come changes in customer purchasing preferences. Before debit and credit cards hit the mainstream consumer market, cash was the favored payment method. Yet as the benefits of plastic have emerged, more customers are moving toward the purchasing option and are expecting their favorite businesses to accept credit card payments. Small Business Trends suggested retailers that have yet to invest in credit card processing probably have customers that are asking for it, and may even be seeing sales decrease as a result of not having the solutions. 

Importance of accepting plastic 
According to Small Biz Trends, the infographic "The Benefits of Small Business Card Acceptance" from Community Merchants USA highlighted the growing need for small and medium-sized businesses to invest in plastic payment processing. SMBs may think accepting only cash is easier, but 58 percent of businesses are frequently asked by consumers to offer multiple transaction options. 

In fact, 69 percent of customers between 18 and 34 years old and 58 percent of consumers between 35 and 44 reported they purchase products and services from SMBs that accept numerous forms of payment. In 2011, cash only accounted for 27 percent of total transactions, with credit accounting for 29 percent and debit for 31 percent. 

Monetary security benefits 
According to Mobiledia, a technology and culture news site, credit cards offer increased financial security and eliminate the need to carry cash altogether. Plastic payments offer more financial security than cash because many debit and credit cards include protection and are easier to track. Since it's introduction in 1946, plastic payments have resulted in increased sales for retailers, Mobiledia explained. The infographic stated that between 2008 and 2011, plastic use added $127 billion to the U.S. economy. 

Debit and credit card payments are set to continue increasing in the next few years. According to the infographic, cash is forecasted to drop to only 23 percent of total transactions by 2017, with credit cards increasing to 33 percent. 

As more customers reach for plastic at the point of sale, not accepting debit or credit cards can negatively impact an SMB's bottom line. By not offering consumers multiple transaction options, smaller retailers lose sales and valuable revenue as customers seek out competitors that have invested in plastic acceptance. 

Nexus: G-WEBCD6