Approximately 92 percent of restaurants in the United States accepted credit cards as a payment in 2012, according to market research provider Euromonitor. That was in 2012, it has certainly increased or stayed consistent. Not only is the acceptance of credit payment that high in the industry, but also about 81 percent of the money that is spent at restaurants is paid with debit, credit or prepaid cards.
Since 92 percent of restaurants accept credit card payments, consider what connotations surround the businesses that are in the 8 percent? According to a survey done by U.S. Bank, 47 percent of consumers preferred to use digital apps for making payments instead of cash. 49 percent of Millenials and 44 percent of Gen X prefers to be able to pay digitally. The trend towards using digital currency has been on a steady upward swing and will continue to for the foreseeable future.
The research essentially points out not just that many customers prefer using digital means of payment, but also that they have come to expect it. What does this say of restaurants or dining establishments that don’t accept credit cards? Suppose a group of friends are exploring some local places and going on a bit of an adventure. If they happened to wander into your establishment, glanced over the menu and made their choices, and when they go to order they find out that the business does not accept credit cards? Buzzkill!
There is scarcely a worse feeling a customer can have then when they are trying to give you their money, and you just won’t take it. There’s something intrinsically frustrating about that experience. It makes you want to never deal with that business again. This is why the development and maintenance of shopping cart applications are some of the most duty laden and strictly supervised. It is the one aspect of an online business that under no circumstance can fail. Any business that has difficulties at the POS is not one that will be in business for long.
If you are lacking an adequate credit card processing solution for your restaurant business, that’s a guaranteed way to lose out on a ton of revenue. You aren’t just losing out on the walk-in business that unfortunately were not carrying enough hard cash on them, no-no. You’re losing out on a potential long term customer which would be “investing” anywhere from $100-1000 dollars a year (or more) into your business. You multiply that over 10 or 20 people and suddenly that’s a TON of money that you’re missing out on annually that could be sustaining or keeping your business afloat. If you’ve ever had that discussion with your friends or peers about where to eat out, you’d know that it’s difficult to get people to try new things. If a customer walks in willingly with an open mind, and they are blocked by such a trivial matter as the business not accepting credit cards, you can see how they might be turned off from the experience entirely.
Many small business owners think that applying for a merchant account is going to be a cumbersome process. It’s not! Not being in business anymore is cumbersome, let’s try to avoid that. It’s no insider info to state that the large majority of restaurant businesses fail. According to this article by CNBC, around 60 percent of new restaurants fail within the first year and nearly 80 percent by five years. One of the major contributing factors to closure is the location. Unfortunately, due to the relationship between location and rent, it’s often the case that new businesses cannot afford to front the high rent costs associated with premium locations for long enough to gain traction. The risk is too high and the payoff is not nearly guaranteed.
What can be done? Well, a business must focus on what they CAN control in order to succeed. One of the first and foremost things that need to be looked at is your POS experience. Not accepting credit cards is one of those simple things small dining places attempt to go without because they see themselves as having a small town or “mom and pop” shop identity, and thus it isn’t necessary. That’s not true! I reiterate, no one wants to shop at a place where forking over money is itself a hassle.
Many of these quaint mom and pop places can garner great local attention for their lack of a rigid corporate identity and their cozy home-like feel. They become prime dating and social spots and so these often tiny venues can become overbearingly crowded and claustrophobic when the payment process is not streamlined. Paying with cash takes forever! It must be counted and change must be given, and customers frequently fiddle with change and sometimes drop it on the floor.
Pinpoint Payments is a merchant processor that can service all of your payment processing needs. Whether you’re a restaurant with a set location or you’re a mobile business that needs mobile solutions, we’ve got your back with our slick, cutting edge POS solutions as well as our ability to resolve issues with chargebacks and fraud—key issues that many local businesses worry about when venturing into the realm of credit card processing. Visit our contact page or give us a call at (866-257-0502).