Market Research Provider Euromonitor has revealed that overwhelmingly, the restaurant industry in the United States accepts credit cards. Approximately 92 percent of all restaurants accept credit cards as payment in 2012. Consider the 7 years that have passed since then and it’s not hard to imagine that number has stayed equivalent or is even higher today. On top of that, about 81 percent of that money spent at restaurants was paid through debit, credit, or pre-paid cards.
Don’t be the 8 Percent
If 92 percent of restaurants accept credit card payments, then what does that say of the remaining 8 that don’t? A U.S. Bank survey has discovered that 47 percent of consumers opted to use digital apps to make payment as opposed to cash. It isn’t much different at all to say they prefer using digital money as opposed to hard cash. The results of the survey are quite usefully broken down by generation. They are as follows: 49 percent of Millenials (19-36), 44 percent of Gen X (37-52), and 32 percent of Baby Boomers (53-71) prefer to make digital payments.
It’s clear from the research that the younger generations increasingly prefer to use digital payments as opposed to cash. The results, however, do not taper off as much as one would think with over one-third of the Boomers at the bottom end still preferring digital payments.
What does this spell out for restaurants that do not accept credit cards? Anecdotally, many people would tell you that if they happened to venture into a new establishment that they have never dined at before, perused the menu and went to order, only to find out that they only take cash. It would be disappointing, to say the least. There is no worse feeling as a customer than when you are trying to give your money to a business but they are making it difficult. There is something intrinsically irritating about that scenario. A business that makes it difficult to get paid is not a business that will succeed in the long term.
Not having a credit card processing solution set up for your restaurant is a surefire way to lose out on a lot of revenue. You’re not simply losing the walk-in business that didn’t carry enough cash on them, you’re also losing their continued business which could potentially be anywhere from $100 to over $1,000 per customer annually—that’s a lot! People can be fickle, and it takes a lot for many people to step outside their ordinary routines and try something new. If you happened to be ill-prepared at that moment a new customer walks through your doors, a bit lost, a bit reluctant to try something new, you may forever lose that business. Small battles win wars.
Grease the Wheels of Your Payment Processing Machine
Think applying for a merchant account is a hassle? It’s not! Do you know what IS a hassle? Not being in business anymore. It is no secret that the vast majority of restaurants 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. As the article alludes to, location is a tremendous contributing factor to restaurant business closure. It is such a difficult obstacle to overcome due to the relationship between location and rent. Having a central location is wonderful, but it isn’t something new businesses can afford because often times the rent exceeds the value the location offers—making it only possible for established businesses to open there.
At some point, the viable locations that a business has access to are out of their control—whether that is through cost or simply due to unavailability. What does that leave us with then? It means that all of the factors that you CAN control must be done to excellence. A restaurant that doesn’t have a streamlined process from order to payment is not set for success. If you have a chokepoint at the point of sale, then it doesn’t matter how efficiently and diligently your staff works; their efforts will have gone to waste as the extra time they have created through speedy service is halted due to the backlog of customers trying to pay. Paying with cash takes forever; customers fiddle with bills, the cashier must give change, the customer drops the change all over the floor and scrambles to pick it up.
Accept Credit Cards for Your Restaurant Business
Whether you’re a restaurant with a set location or you’re a mobile business that needs mobile solutions, you need to find a merchant processor that offers cutting edge POS systems and specializes in fraud management and chargeback services.
