Merchants hesitant to adopt credit card processing might be receiving plenty of misinformation. If a customer has the cash to pay, isn’t that the better option? Walk-in payments have a series of challenges, and the retail location is where many of them occur. If a customer faces long lines or few payment options they may just head down to the next block for their purchasing needs. Here are a few of the top myths that plague the walk-in customer.
1. Lots of Customers Are “Cash-Only”
While it is true that a customer may prefer to avoid credit transactions due to high interest rates, that doesn’t mean they will only pay using bills and coins. A debit card transaction is still a cash transaction for the consumer.
2. Brick and Mortar Stores Are Closing
Why invest in payment systems to handle walk-in customers when e-commerce and warehousing are the waves of the future? While it is true that some big box retail is struggling to meet consumer expectations, specialty retail is stronger than ever. For every store that closes, another one opens. Even with record-breaking store closings in 2017, more stores opened their doors than shut them.
3. Credit Processing Is Expensive
While every card transaction carries a transaction fee, consumers spend more using their cards than with cash. After all, with cash a consumer can only spend the money physically present in their wallet. With a card or other payment option, they can access funds held in the bank or on a revolving credit line.
4. Most Customers Carry Cash
While it is true that many customers have at least a little bit of cash, a recent Bankrate survey revealed that most carry less than $20. That isn’t enough to fill a gas tank, much less make a more substantial purchase.
5. Fraud Is Less of a Problem With Cash
Chargebacks and other types of denied transactions can be an issue with payment cards, but retailers face many of the same issues with cash. Cash can be stolen or counterfeit, leaving the retailer holding the bag on the sale.
6. Cash Is Easier for Customers
Making a payment with cash might be, arguably, easier for certain segments of the market including underbanked and unbanked consumers; however, many consumers in these segments now have access to debit cards (including pre-paid debit cards) than ever before.
7. Cash Is Better for Cash Flow
Any cash collected during a sales day can be immediately deposited and used for expenses. Money collected through a settlement system does take a couple of extra days to deposit, but for most businesses, deposits are not handled daily, either. Rapid turnaround means that businesses rarely wait more than three days for their payment processing deposits.
8. Adding Payment Methods Is Expensive
Card payments do need specialized equipment, but that equipment is unlikely to break the budget. With everything from small, mobile solutions to fully functional register terminals, the capital investment is negligible.
9. Adding Card Processing Is Slow
Adding a card processing element to existing operations can happen in a few days. Businesses simply need to open a merchant account. Once that happens, setup is often intuitive and nearly instant.
10. Cash Transactions Are Faster
With the addition of mobile payments to the mix, there is no question that card transactions can be much faster than traditional cash purchases. After all, customers can order and pay ahead of time and only head into the store for pickup.