Entrepreneurs prefer check, cash payments
Small businesses often rely more heavily on a dual purpose cash and check scanner than credit card processors. New research shows that despite the popularity of cards, entrepreneurs are still more willing to embrace more traditional forms of payment from shoppers.
According to a survey from WePay, the majority of small-business owners prefer to receive paper payments from a customer, as opposed to an electronic one. Seventy-two percent of those polled said they wanted shoppers to pay with cash or checks. This strong inclination could contribute to the number of small businesses that accept only traditional payments.
New ruling could spur fewer credit card payments
Some cash-only companies have had to adopt credit card processors to accommodate a growing consumer base, but a recent ruling could actually have shoppers requesting to pay with cash or checks to avoid additional fees. U.S. retailers have long complained that credit card surcharges make it more difficult for them to be competitive, especially since they were previously unable to pass this card use charge along to consumers and had to absorb it as a necessary operational cost.
A recent settlement allows many business owners to now charge a processing fee when consumers pay with a card. This could encourage those who frequent local shops to continue using more traditional forms of payment to keep their transaction amounts lower. It will also help entrepreneurs stay competitive, as they will no longer need to pay the additional charge for accepting some card transactions.
However, the settlement won't be applicable to all entrepreneurs. Certain states already prohibit businesses from charging consumers more for using a card. Companies that find they cannot add on this additional fee may decide not to accept card payments at all due to the cost. This will require shoppers to shift their purchasing strategies and rely more heavily on checks and cash.
Regardless of whether merchants decide to add an additional fee to credit card transactions or eliminate their acceptance of card payments entirely, they will see more traditional transactions and need to adjust their strategies accordingly. Having the latest cash and check processing machine and employing remote deposit capture or image cash letter technology makes it easier for small companies to have effective backroom processes, eliminate their reliance on credit card purchases and continue to serve shoppers optimally.