Cash-only merchants might think they’re saving money by avoiding credit card processing fees; however, they may miss out on potential sales. According to the Federal Reserve’s 2022 Diary of Consumer Payment Choice, consumers used cash for just 26 percent of all payments in 2019. Saving on processing fees at the expense of losing sales can have a negative impact on the bottom line. As times and trends evolve, businesses need to consider adding electronic payment methods across all channels.
Five Benefits of Accepting Electronic Payments
Although electronic payments offer merchants a range of advantages, VARs and ISVs may need to present the case to convince their small and medium-sized business (SMB) clients to upgrade to modern payment technology. Educate your clients on these benefits of electronic payments.
- Attracting Customers
As technology evolves, so does consumer behavior. While cash was at one time the most preferential way to pay, 67.67 percent of consumers across generations now prefer debit and credit cards to any other payment method. Cash-only merchants are closing the door to new and repeat business from customers who prefer digital payment methods. - Generating More Revenue
Most consumers prefer to use digital payments. Furthermore, when they do, they spend more. Consumers who pay with a card purchase up to 83 percent more than those who pay with cash or check. When they aren’t limited to cash on hand or can use a credit card account to cover a purchase, consumers can buy everything they need or want. - Adding Channels
Cash-only merchants limit their sales opportunities, not just by the preferred method of payment, but also by preferred channel. By implementing electronic payments, merchants can accept them in-store, online, at unattended kiosks, and even through social media or texts. An omnichannel digital payment platform offers merchants opportunities to expand their businesses and bring in more revenues. - Saving Time and Operating More Securely
Electronic payments provide greater accounting efficiency and improved cash flow. Card payments can go straight to a merchant’s bank account, and integrated payments automatically share data with accounting software. This makes balancing the books faster, easier, and more accurate than reconciling cash only. Additionally, large sums of cash can pose a security risk to the business from potential theft. - Guarding Against Payment Disputes
No one wants to deal with chargebacks on payment card transactions. However, they’re easier to address than check or ACH disputes. With a chargeback, a merchant has the opportunity to provide receipts and authorizations. Disputes with ACH or checks make it much harder to recover losses.
Help Your Clients Stay Relevant
Electronic payments have become essential to where and how consumers prefer to shop. Beyond using debit and credit cards at the checkout, consumers also pay with mobile wallets and contactless cards, click on text-to-pay links, and use unattended payments at kiosks. They look for the most convenience and the least friction, and that’s often not paying with cash.
Cash-only merchants may resist change, but integrating electronic payments will help them stay relevant now and in an increasingly cashless future. Now more than ever, it is vital for VARs and ISVs to integrate their solutions with a payment platform that can provide merchants with the capabilities required for a fully omnichannel payment solution in a world where cash is no longer king.
