Why I Caved and Started Accepting Credit Cards… And Why You Should Too

Chris Ronzio

On The Profit (CNBC) a few weeks ago, they featured a BBQ restaurant in South Carolina that didn’t take credit cards. The owners, like a lot of small business owners, cited the 1.5-2% fees as reason enough to be cash-only. But, by not accepting credit cards, they were turning away cashless customers and losing business.

Marcus, the investor on the TV show, explained that the lost revenue from not accepting cards far outweighed the cost of accepting them, and the net gain by making the change was over $30,000 per year.

Ironically, a few minutes after I saw the show, I got this email from one of my consulting clients:

“You need to take credit cards!!!! I hate paper checks. You’re like that one last guy who won’t give up on his VCR.”

Crap. That’s totally against my brand and everything I stand for. But, before I make a snap decision, I need to think this through.

I’ve always steered away from taking cards for my consulting business, because with several thousand-dollar transactions, the fees on one payment are enough to buy an iPad. Occasionally, I’ve given people the option to pay by credit card if they accept a 3% surcharge – just enough to cover my Stripe transaction fee. Is this small-thinking?

With my video business, accepting credit cards was necessary, just like the restaurant example from The Profit. I’ve even accepted credit cards for a garage sale using Square. But in my consulting business, I never thought my no-credit policy was turning away business, because clients were already committed to their projects before paying.

Thinking Bigger

Ok, so it’s not about turning clients away. But, the experience that they have with me is what keeps them coming back. Just like paying for your coffee through the Starbucks app or shopping for groceries with Apple Pay makes your transaction smoother, I want working with me to be as easy as possible for my clients. The better the experience, the happier they’ll be. The happier they are, the more referrals and additional business I’ll get. And I should be able to grow my business by more than 3% as a byproduct of that happiness.

More Justification!

To convince myself that this is a good idea (and that I’m not just throwing iPads in the trash), I needed to think this through some more.

Last year I leased a car, and the downpayment went straight on my credit card. If car dealerships with large transactions have accepted credit card fees as a cost of doing business, then why can’t I? Maybe every customer at the car dealership doesn’t have the full amount due in cash, so putting the transaction on a credit card is a simple way to finance their purchase in the short-term. Similarly, small businesses that invest in my services might start to see the benefit of the results a month or two after our engagement. Putting the purchase on a credit card might be easier to swallow, and that could help me close more sales.

Accepting credit cards could also help to improve my receivables aging. With checks, customers immediately feel the impact of their purchase, so they might delay payment longer than if they put the expense on a credit card. Getting paid quicker and having to follow up on invoices less frequently is another major benefit of the decision.

Oh, and how could I forget the points! I’ve traveled around the world on points from my business purchases, so it’s only fair that I help my clients do the same.

So, are you still a check-only business? Don’t be the last guy that won’t give up on his VCR. I won’t be.


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