For many years only very traditional businesses (hotels, restaurants, retailers and so forth) accepted credit cards. With the advent of the Visa or MasterCard debit card, things started to change significantly. Even merchants with very small ticket sizes (fast food restaurants, coffee shops, 7-11 stores) got into the act. This was not because consumers needed to “finance” these tiny purchases on a credit card, but because these check cards replaced cash for many transactions. Business owners with the smallest transactions today have no idea how much business is lost by not accepting card payments. When a consumer is inconvenienced even one time by not having their card accepted, the odds of them frequenting that same business are greatly reduced.

Now, what about very large transactions? Visa, MC, and even Discover and American Express have realized the opportunity in carrying some of the paper for businesses that perform B to B transactions and need to extend credit terms to clients, but don’t have the cash flow or cannot afford the credit risk. With that in mind, the card companies have come up with numerous charge categories designed with the business to business transaction in mind. 

Some of the charge categories- called interchange rates- were designed for corporate procurement, government purchasing and even government to consumer payments for larger transactions such as property taxes. Businesses small and large can now in essence provide open lines of credit to clients simply by accepting their credit cards. 

The average factoring company can charge between 3% to 6% or more to cover accounts receivable for businesses. If that same business isn’t accepting credit cards, they’re missing the boat on a large number of transactions where they can minimize the risk of non-payment or the high cost of factoring. 

Now there are other businesses that never before considered accepting cards that are jumping into the market. Amongst these might be mortgage companies for loan fees, apartment complexes for rents- and the ability to accept recurring monthly payments in an automated fashion, attorneys for retainers, insurance companies, and now even utility companies. 

With all of the various payments methods and options surrounding the use of credit cards, it’s no wonder that cash and checks are rapidly dwindling in their usefulness. One day we’ll probably see a panhandler on a street corner accepting credit cards!