Accepting credit cards is becoming a must for entrepreneurs and 
small businesses in today's business environment. There are 
numerous social, demographic and technological factors combining 
to make plastic the payment form of choice for increasing numbers 
of people. 


By the Numbers

The average American cardholder has roughly four bank credit 
cards. Credit card purchase volume has been expanding about 15 
percent per year for the last five years, or three times faster 
than the increase in overall U.S. purchases. Debit card purchases 
are growing even faster, at more than 50 percent per year. Credit 
and debit cards are expected to account for 33 percent of all 
purchases by next year and for 43 percent by 2005. According to 
one estimate, businesses forfeit up to 80 percent of consumer 
impulse buys if they don't accept credit cards.


Why People Use Credit Cards

To understand the growth in credit card use, it's important to 
grasp the reasons for their popularity. Consumers typically use 
cards because: 

 * They don't want to carry cash 
 * They want to save cash in hand 
 * They want to gain loyalty points (such as airline miles) 
 * They are making a large purchase 
 * They are looking to float money in a bank account 
 * They are making a reimbursable purchase for a company 


Plastic on the Internet

Even as credit card use grows in the real world, plastic already 
dominates the world of Web shopping. This breakdown of how people 
pay for online purchases demonstrates that credit cards are the 
key to e-commerce: 

 * Credit card online - 85% 
 * Check mailed - 10% 
 * Credit card via phone - 2% 
 * Credit card via mail - 1% 


The Business-to-Business Opportunity

It's becoming increasingly clear that credit cards are also 
playing a greater and greater role in business-to-business 
transactions. For example, visa  is bundling credit and cash 
management products for small businesses under the umbrella of 
the Visa Business Card.

Larger companies are also streamlining their buying processes 
using so-called business cards for indirect purchasing. Each 
business card transaction shaves a reported $50 to $100 in 
purchasing costs. That's something to keep in mind if your 
company works with large companies.


The Future of Plastic

Market research indicates that consumers view credit cards as 
lifestyle enhancers that contribute to other areas of interest in 
their lives. And credit card products now in development, such as 
the "electronic purse" and online debit cards, promise to further 
extend the use of credit cards.

It all adds up to bad news for checks. Paying with plastic is 
becoming increasingly popular for even routine bills such as gas 
and electricity. And younger customers' preference for plastic 
cards is even more pronounced. These trends are projected to 
cause check and paper credit use to fall from 32 percent of all 
non-cash transactions in 1997 to just 14 percent by 2007.

For more information on how your business may benefit from 
accepting credit cards now. Click over to 
http://www.cmscreditcards.com
 

Scott Burke; President of iMAX Business Solutions in 
charge of sales, strategy, and execution and thus is 
responsible for managing all aspects of the company's 
marketing, communications, new accounts, and support. 
scott@cmscreditcards.com
http://www.cmscreditcards.com/