Back in 2013, Intuit reported that 55% of small businesses weren’t accepting credit card payments from customers. That’s a problem for small businesses for a variety of reasons:
1. Patrons prefer plastic: A report by TSYS revealed that 75% of consumers prefer to make payments with credit or debit cards.
2. People spend more on cards: A Dun & Bradstreet study found that consumers spend 12%-18% more when paying with cards compared to cash. For example, McDonald’s restaurants report average card orders of $7 compared to $4.50 for cash orders.
3. Cash and checks are going away: A report by Nilson shows that payments by cash and check will decline by 24% and 46%, respectively, by 2018, while card payment volume will grow by 50%.
So, local companies can make more money by accepting card payments. In fact, a teaser from a soon-to-be-released study by Visa suggests that in New York City alone, businesses could generate an additional $6.8 billion in revenue if they stopped accepting cash altogether.
Turns out, more small businesses are getting with the program and taking debit and credit card transactions, and it’s having a national impact. Our data science team recently analyzed transactions for 75,000 small businesses in all 50 states over the past two years. We found that revenue from credit and debit cards is up nearly 7% for local businesses nationally during that time.
A few additional takeaways from our analysis:
- State of growth: The top states for growth in card transaction revenue are: 1. Hawaii (14.19%), 2. Georgia (10.12%), 3. Colorado (9.96%), 4. South Carolina (9.69%), 5. Utah (9.27%).
- State of decline: Only two states saw negative growth in card transaction revenue over the past two years. Wyoming saw a 1.12% decline, and Alaska was down 0.94%.
- Power industries: Small businesses in the services industry are up 9.39% in card revenue, automotive is up 7.31%, food service (restaurants, cafes, etc.) is up 6.63%, and retail is up 4.77%.
The graphic below shows how every U.S. state ranks out, and how local businesses in those states are faring in our four key industry segments. Take a moment to see how businesses in your state and industry are doing.
This kind of analysis is possible because Womply partners with many of the nation’s top credit card processors to help small business merchants understand their company vital signs. Seeing a daily view of your business’s revenue can lead to better business decisions that save time and money (just ask the folks at Letcher Bros. Auto Repair).
Once your business takes card payments, it’s extremely valuable to see how those transactions impact your business. Womply customers get a two-year view of all their transaction revenue and can easily see how sales are trending, which days are the best for sales, how they compare to other local businesses, and much more. To learn more about our small business software, talk to your credit card processor or request a demo.