At one point or another, every company comes to the realization that they have to evolve their policies and operations in order to survive in an increasingly innovative society. The end result can vary depending on where each organization was respectively before making this decision. For example, while some forward-thinking vendors are probably spending 2013 evaluating potential solutions to fit their mCommerce needs, others are finally making the leap from a check and cash exclusive operation to credit card acceptance.
Making this transition—particularly to those who held out for so long and are only now considering adding credit cards as one of their accepted forms of payment—can be intimidating. However, the change is necessary, even if "the old way of doing things" seemed adequate enough prior to adopting a credit care processing system. To help with the process of making this transition, it's first essential for vendors to understand why they should make the change in the first place.
The online publication Finextra is currently running a series on credit card acceptance and why businesses should consider adding that component of their business if they haven't already.
"Suppliers may be surprised to learn of the extent that Buyers will alter their spending habits in order to maximize the benefits of their card programs," he wrote. "Card acceptance is a significant decision driver in the consolidation of vendors."
According to the study, companies are looking for ways to consolidate vendors into particular spend categories, and one way they can decide whether or not to continue doing business with a particular provider is if that company accepts card payments. In fact, 38 percent of buyers said they have consolidated vendors based purely on which could process their card payments. Moreover, 49 percent of survey respondents said they were "likely" or "very likely" to increase buying volume from a vendor if it began accepting credit card payments.
This data is too crucial to disregard. The popularity of plastic payments—whether they are from a credit card or corporate purchasing card—is so high that any company that can't process these types of transactions will likely fail to bring in the business it needs to maintain its viability. There was a time when checking was the preferred method of payment and any organization that accepted credit cards rarely encountered customers that paid that way, but now the opposite is true.
Failure to accept credit cards is only hurting a company's profitability. It's likely that some companies have essentially retired their checkbooks in lieu of cards, so if an organization won't accept their form of payment, they can't do business with them. In an increasingly competitive marketplace, vendors need to do whatever they can to gain a competitive advantage. Not accepting cards will not only fail to help in this regard, it will put vendors at a major disadvantage.
Of course, businesses still need to address the main reason why they have been so hesitant to accept credit cards in the first place—their processing fees. While accepting card payments will open up the customer base, it can diminish the value of each transaction by cutting into profits. That's why working with a B2B payments consultant is so important. These professionals can work with organizations to offer the best solutions needed to process Level 3 data, which will help vendors pay the lowest possible interchange rate.