Recently, I tried to purchase a money order at the local Post Office only to be told that my credit card payment was not acceptable. The Post Office official stated that I could only use cash or a debit card – neither requirements I could satisfy at the time.
This is not an uncommon experience for me as I have frequently encountered a strong desire to assume the role of buyer only to be rebuffed by a seller who did not want to accept my form of payment. On these occasions, business could not be transacted, leading to a lose-lose situation for both seller and buyer. While I, as the buyer, could find other options eventually, the seller is left in a more immobile state – stuck in a more difficult circumstance. Indeed, the survival of a seller’s business is ultimately dependent on the buyer whose needs must be satisfied. If one of the buyer’s needs encompasses paying a certain way, it behooves the seller to be flexible and, if at all possible, accept that payment as a form of currency – as a conduit to transact business deals.
Imagine a hard-working door-to-door salesperson who appears to have secured business contracts with two different households. In this hypothetical scenario, the salesperson can only accept cash or credit cards, leading to a problem. While Household A desires to pay with a credit card, Household B does not have that capability and can only pay by check. The salesperson informs Household B that they can pay with cash, but Household B does not want to go to the trouble of obtaining cash or is low on cash. Can this salesperson potentially lose that sale? The answer is an unequivocal, “yes.”
Surprisingly, this situation happens with great frequency, especially when impulse purchases are made. ATM machines are now omnipresent in retail establishments because if there is an availability of cash, people have a tendency to spend it. However, if there is no quick access to money, individuals may opt to “just forget about it.” In other words, a buyer may be thinking, “I don’t have enough cash I am already overextended on my credit cards you don’t accept checks, maybe I should forget about the purchase.”
A credit-card only enterprise may be astounded by all the potential sales that are lost simply because they do not cater to the habitual check-writer. This is particularly true on the Internet. Over 75 million buyers in the United States have no credit cards so accepting checks has the potential of doubling or even tripling the customer base. Here’s another way of looking at this situation. Half of Americans do not have credit cards and half of those who have cards in their possession are “maxed out,” leaving only one-fourth of all consumers who can buy things on the Internet. As competition is fierce, it is especially poor business practice to lose potential clients – especially when it is so easy to remedy.
Companies can now easily provide a payment gateway for new and existing Internet businesses to receive check payments. The system can be simply integrated into any shopping cart, dramatically broadening the customer base. The transactions are automatic and the transfer of funds from client to business owner takes place through the Automated Clearing House (ACH).
For those businesses already accepting checks by mail, the transition to online electronic checks should be a “no-brainer.” Why compel your customers to go through the hassle of writing and mailing a check when they can simply forward that information to you more expediently? Why wait for days (slowing cash flow) when you can have more immediate access to the customer’s banking information, to more quickly process their payment and fill their order?
I do not mean to suggest that online electronic checks should take precedence over credit cards. In fact, credit cards are the preferred method of payment for many individuals. Such folks like the ease and convenience of credit cards, and appreciate the month float time. Many only pay a portion of the total credit card amount, temporarily lessening their obligation.
I merely emphasize the fact that accepting checks with credit cards simultaneously broadens your customer base, increases sales, maximizes cash flow and caters to all prospective buyers. Each payment by itself does not do the job. Combined, they are a commercial force where the total happens to be greater than the sum of the parts.
Author, William Hamilton, owns a payment processing company, IntelliCollect, and their services are listed at: http://www.intelli-collect.com. His company offers tremendous assistance to new and veteran business owners who need an effective solution to accept credit cards and checks.
