Cash may be king, but Canada appears to be inching toward becoming a cashless society as more Canadians make purchases with a credit card, debit card, or a digital payment solution like PayPal, Venmo, or an e-wallet like Google or Apple Pay.

It’s estimated by 2030, there will be a 70% drop in cash purchases, and only 10% of all money spent in Canada will be done in cash compared to 35% in 2014, according to Moneris Solutions. A separate report by money.co.uk suggests Canada is the world’s most cashless country, with 83% of the population owning a credit card (the highest usage in the world). It’s conceivable the COVID-19 pandemic has accelerated this transformation as more people opt to make contactless payments for goods and services in person. However, that doesn’t mean cash will disappear any time soon, as the Bank of Canada notes in a recent survey that 80% of Canadians say they have no plans to go cashless in the next five years.

credit card payment

Nevertheless, the monetary landscape is shifting, emphasizing the need for Canadian small businesses to adapt to accepting cashless payments more frequently from their customers at the point-of-sale (POS). While there are options aplenty in that regard, it’s a safe bet you need to be ready to accept credit and debit card payments.

Tips for Accepting Credit and Debit Card Payments

There are several ways a small business can accept credit and debit card payments by using a POS system or a mobile card reader that accepts payments through a smartphone app. To process credit and debit card payments, here are a few steps to consider:

  • Choose how to accept card payments. There are four options for accepting credit and debit card payments: in-person, online, over the phone, and mobile payments. Depending on your business, you may need only one option or a combination of all four. For instance, if your small business operates exclusively online, it’s unlikely you’ll need to invest in a POS system like you would for a retail brick-and-mortar store. Or, if you’re a contractor or run a landscaping business, a mobile card reader may be the way to go so you can accept payments at a customer’s location.
  • Pick a payment processor. Accepting card payments in-store requires a merchant account like a business bank account. You can set one up through a merchant service provider or your local bank. A merchant account provides a POS system, credit card terminals, and payment processing. However, be advised a merchant service provider will charge you fees. Explore your options and understand what types of payments they can process (in-person, online, over the phone, mobile), what fraud protection they offer, and a breakdown of the fees they charge. Some popular payment processors include PayPal, Moneris, Stripe, and Square.
  • Have the proper hardware and software. You’ll need a POS system that includes a card reader and accompanying software for a physical store that your customers visit.  You’ll also need to be able to accept payments online if you sell your goods and services through your e-commerce website, and every business engaged in credit card processing must adhere to the Payment Card Industry’s Data Security Standards. If you only sell goods online, you’ll need to sign up for a payment gateway service through your bank or a merchant service provider that integrates with your website.

Why Small Businesses Should Accept Card Payments

Giving your customers the option to make purchases using a credit or debit card can benefit your small business in multiple ways, including:

  • An increase in sales. Not only will it help you attract new customers, but accepting card payments can give your bottom line a boost since data suggests consumers tend to spend up to 83% more when using a card instead of cash to make a purchase.
  • Ups your cash flow. Credit and debit card payments happen quickly, and the transfer of funds usually arrives in your bank account within a day or two. In contrast, if you accept a cheque, you’ll typically wait for three to five business days before it clears.
  • Enhances your security. With less physical cash on hand, you decrease the risk of theft or loss. Even fraudulent credit card transactions can often be recovered through your merchant service provider or bank. Although cybersecurity is an omnipresent threat that all small business owners must deal with, cyber liability insurance is an integral part of a comprehensive risk management strategy to help protect your business from a cyber-attack or data breach. 

Be aware that your payment processor will charge you credit and debit card transaction fees for each card payment, including a processing rate and transaction fee. Therefore, it’s worthwhile to look around and find out what different service providers charge to find the right service for your business.

It’s hard to know what the future of money is. Regardless of whether Canada becomes a cashless society or not over the next few years, there’s no denying Canadian consumers are using cash less often. Offering your customers multiple ways to pay for your goods and services is another way to ensure you provide top-notch customer service.

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