Payment options have come a long way since the days when cash was king. Consumers today expect to be offered a variety of payment options. While it might be cheaper to limit those options and reduce the fees that you need to pay and the equipment that you need to buy, in the long run, it can limit the potential of your business. Read on to learn more.
Why Don’t Merchants Give Their Consumers More Choice?
A lot of fledgling businesses still insist on implementing a ‘cash only’ policy, which in a pre-covid world was an annoyance, but now it could be seen as a matter of health and safety. Such an insistence can act as a deterrent and send customers packing. Most consumers today are unlikely to carry cash, especially the younger generation, which means that your target audience may be limited. The lack of choice comes down to the merchant. Sometimes implementing a cash-only policy is cheaper; you don’t have to purchase payment terminals or software. It is also easier to make direct deposits with cash to the bank. They don’t have to look into other options. It can be easier to get the business up and running because there are fewer variables in play than when trying to set up other options, purchasing the software and ensuring that everything is legally compliant.
The Benefits of Having More Payment Options
Excluding certain payment methods can dramatically limit your sales opportunities. Some customers won’t have the choice; they will have to leave your establishment if you don’t have options that cater to them. It is extremely important for customers to be offered flexibility when it comes to payment options. Having more options opens up your potential revenue stream.
You might want to think about your target audience. For example, if your products are marketed to young people, then having more options is important as a lot of young people don’t carry that much cash; they are all about card payments. Although if your products are geared towards older people, then having a limited number of payment options may not be the worst thing because a lot of older people are more likely to deal in cash.
By not having enough options, you could also be limiting the maximum purchase that someone could make inside your business. Out of those who do carry and prefer to use cash, the likelihood that they will carry enough to make a substantial purchase is highly unlikely. Therefore, in order to maximise the potential buying power of your consumers, you should offer multiple options so that they don’t feel that their purchasing potential is limited to your cheaper items.
Having more payment options can also be more hygienic. For example, during the Covid pandemic, a lot of people began to use cash less, preferring to pay by card because it was cleaner. All of the money in circulation goes through a lot of different people’s hands which is why there are hundreds of microorganisms living on your bills. Although it is true that, for the most part, these microorganisms are relatively harmless, this is not always necessarily the case. The pandemic made a lot of people more aware of the effect that germs can have. Having more payment options can protect your consumers as well as yourself from having to come into contact with these germs unnecessarily.
What Payment Options Should I Offer?
The two main options that you should offer your consumers is cash and card. While it is true that cash may be easier, having a card payment option is also highly recommended. Some business owners are put off of investing in a card payment option because a lot of providers charge a fee for businesses to use them; however, this is not always the case; for example, Nadapayments allow you to take home 100% of the fee that you charge. Processing fees for credit card become a surcharge for the consumer although this is easily avoided should the consumer pay by debit, cash, or check – if you accept checks. You could also offer an online payment portal for consumers to use. This is incredibly popular for smaller businesses. A consumer can scan a QR code which directs them to a website where they can then purchase their goods without any money changing hands or them having to use a card reader.
Most industries are subject to change; they need to keep pace with technological advancements to avoid obsolescence – and it is no different for payment methods. Thanks in part to the recent growth of digital commerce, payment methods have changed consumer experiences in recent years. However, it is not just the consumer who has benefitted from this exercise in convenience; businesses have too. It’s a win/win.