Is it worth it for businesses to accept credit cards?

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It costs money for a business to accept credit cards. It would be nice if it was free, but it isn’t. The cost is generally between 2% to 5% to accept credit cards. Sometimes even more for certain high risk businesses. Now, you need to figure out whether it’s worth it.

These are rough numbers, but there are around 32 million businesses in North America and about 9 million accept credit cards. Digging into that number a little, 70% of businesses have little to no revenue. They are basically holding companies which we can call micro businesses.

Most small to medium sized businesses accept at least one credit card. They do this because of customer demand. They have found that accepting credit cards increases sales. Businesses that we talk to say they have 20% more sales when they accept credit cards. A 20% increase of sales for a business that has a positive operating margin makes sense. 

Now in the end, your customers are the deciding factor. If your customers will increase the average amount they spend, or return to your store more times, or you will get new customers, it is a no brainer to accept credit cards. 

You’ll never really know until you test. Test it out with a payment processor. Make sure the payment processor you sign up with has no cancellation fees. Try it out for one full cycle of seasonality to determine the growth. You’ll know pretty quickly if it’s worth it to accept credit cards.


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