Why is it that we feel safe and secure when we dine in the elegance of a nice, reputable restaurant? Compared to that experience, a friend of yours repeatedly begs you to come try out some of the best (insert random food here) in the area he’s had—it’s in a food truck situated on a grass lot that may or may not be next to the underpass. When you get there, you come to find that they don’t even accept credit cards. You take a good look at the “chef” and secretly question his or her credentials or if they even wash their hands as often as you’d like. In regard to our restaurant analogy, the word we’re looking for is credibility. Credibility is an important social factor that permeates all aspects of life; no one can fact check everything, but it’s often easy to find demerits that heavily influence consumer buying habits. A big demerit of a business? They don’t accept credit cards.
Not accepting credit card payments is one of those simple things. It’s very possible that the food truck was one of the finest dining establishments this side of town, serving up exquisite gourmet food, but unfortunately, they were not in touch with a quality payment processor with a slick mobile card reader for the business on the go (no pun intended). This gives a feeling of illegitimacy to the business, that they’re not “official”.
Gen Z, the Digital Dwellers
The future is near, and Millenials and Gen Z will largely inhabit it unless unexpected and miraculous breakthroughs in medical technology arrive. Guess who doesn’t like to use cash? Those darn young folks.
We can’t blame the youth though, research shows that one in four Americans don’t carry cash or seldom carry cash on them. The study cites Millennials as one in three and the inference is that Gen Z is as unlikely or even more unlikely to carry cash on person.
This is a generation that has largely grown up in a digital space. They shop online, they text instead of meeting up face to face, many of them play video games instead of sports, and a portion of them prefer online classes to traditional college. They even contributed largely to the resurfacing of polaroid cameras and record players—because tangibility is a novelty to them. To them, using cash is closer to novelty than using plastic is and is often seen as something used in emergencies.
The smart phone generation prefers to do everything digitally, a business which does not service credit card payments to the generation which will comprise 32 percent of the global population in 2019 is sure to be a business which loses out on sales.
The Psychology of Credit Lines
It should come as no surprise that consumers spend significantly more money when using credit cards than they would have if they had used cash. The reasons come down to one or two simple concepts and their underlying psychology.
Have you ever been at a store or perhaps shopping online and you were tempted to make an impulse buy? We all have. So, you sit there, calculating your monthly takeaway and moving the one and the four…the only time you’ll voluntarily do math is to justify such purchases.
The reason why many buyers can justify such purchases is because the consequences do not feel immediate. Gratification up front, expense later. It’s not all bad though, credit can be a wonderful thing for consumers and businesses alike. Much like alcohol and socializing, credit loosens up spending habits a fair bit allowing consumers to purchase more expensive items at a critical time and it generally increases revenue for local businesses that allow for credit processing to occur.
“What’s in a name? That which we call a rose by any other name would smell as sweet.” Shakespeare was obviously talking about cash when he wrote this line. What is credit but an abstraction of cash? Because credit is abstracted, it is less felt than when cash is spent where you can visibly see the money disappear. Cash has limitations that credit does not. If you went to purchase something and only had cash, the business has a limited opportunity to suggest or upsell you because cash is a limiting factor. This is a huge reason why small businesses that accept credit cards make more money—because customers who purchase via credit have a lot more spending flexibility.
Accept Credit Cards for Your Next Business
We’ve gone over three general reasons why your business needs a reputable merchant processing service:
- It makes you more credible in the eyes of customers.
- Cash is becoming increasingly irrelevant to the younger generations which feel it’s a hassle to carry.
- Customers spend more using credit cards than with cash.
At Pinpoint Payments, we offer top of the line POS systems, chargeback management, and fraud prevention solutions so you can start accepting credit cards today. We are confident our credit processing services can help your business increase sales in store and online, contact us at (866)-256-4574 so you can start seeing results sooner rather than later.