Faster Payment Systems
The Cost-Benefit Analysis of Creating Faster Payment Systems
The merchant landscape today is moving at lightning speed. Digital and mobile technology have leveled the playing field so small businesses can compete with their larger counterparts. Although local companies don't have the same financial firepower that corporate businesses do, they can leverage new and cutting-edge technology to streamline operations and better serve the customer.
However, some merchants are still entrenched in out-of-date methods and don't want to invest in the future of their business. Old or traditional technology, such as electronic cash registers, served their purpose at one point in time. Now is the time to upgrade point-of-sale systems and serve the customer the best way possible. A recent Intuit study found that more than half of small businesses surveyed don't accept credit cards (1). In today's day and age when digital payments are growing at an exponential rate, that figure may come as a surprise to most. Small businesses that aren't giving their customers different payment options may be holding back their business growth.
Benefits outweigh the investment
Even though the economic landscape is slowly recovering, small-business owners may still have doubts about upgrading POS infrastructure. They fear the upfront investment is too much to swallow at once, but they can't get beyond the initial expenditure that's associated with a new POS system. The initial costs are outweighed by the security and speed that comes with a cutting-edge POS infrastructure. Partnering with a trusted payment processor is the best way to not only secure your business, but also expand it. Merchants today can grow their operation through the point of sale since its software can integrate with many other platforms and systems. The POS can serve as the business intelligence hub, handling payments, inventory and back-end reporting and analytics.
The amount that businesses can save on protecting their operation far exceeds the marginal investment of a POS upgrade. They not only improve business intelligence and reporting paperwork, they also will help merchants prepare for the upcoming EMV liability shift. A recent European Commission study found businesses that operated using just cash spent more than one-third of their time in back-office labor tasks (2). Conversely, businesses that operated using credit or debit spent less than 5 percent with back-office labor tasks.
Target your customers
Intuit found that 69 percent of millennials won't shop at businesses that only accept cash. While some may scoff at that idea, it's important to keep in mind that this generation, which is 80 million strong, has annual buying power of more than $200 million, Forbes said (3). Investing in a robust POS system is an initial step to keeping up with the payments technology.
2. European Commission, http://ec.europa.eu/competition/sectors/financial_services/presentation_results_en.pdf (Feb. 19, 2014)
3. Forbes, http://www.forbes.com/fdc/welcome_mjx.shtml (Jan. 20, 2015)
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