Paper or plastic? In the supermarket, paper may be making headway as a packaging choice, yet when it comes to making purchases, today’s consumers are choosing plastic – as in credit and debit cards – in ever-greater numbers. If your company still is in the "paper only" mode, you may be losing sales and profits.

In a nationwide study of consumer payment preferences conducted by the American Bankers Association and the Dove Consulting group, fewer than half of all in-store transactions were made using cash or checks. The number fell from 57 percent in 1999 to 44 percent in 2005.

Debit cards are seeing a significant increase in popularity. Americans used Visa- and MasterCard-branded debit cards for more than $576 billion in purchases and cash advances last year, a 16 percent increase over the previous year.

Some companies resist acceptance of credit and debit cards because of costs, yet the benefits of making this option available to your customers – even for smaller companies – can substantially outweigh the expense.

A merchant account that gives you the ability to accept plastic payment allows you to offer an added convenience and flexibility for your customers.

Think of it – a customer comes into your business and wants to buy your product or service. Some customers may need to spread payments over a few months. Others may prefer the convenience and easy record-keeping that credit and debit card purchases allow. Doesn’t it make sense – especially in today’s challenging economy – to make it as easy as possible for the customer to complete that transaction the way he or she wants?

Credit card acceptance also may increase sales, because consumers tend to spend more when they use credit cards than they do when paying with cash. Rebates and travel miles also are incentives that cause consumers to want to use credit cards for purchases.

Those are plusses for customers. What’s in it for you?

Cards also may reduce your costs and improve cash flow. When your customer pays with a credit or debit card, you can collect much quicker – with funds deposited into your account as soon as the next business day in many cases. Check processing can take longer – and the time from purchase to money in your bank account stretches even further when you must send an invoice and wait for payment.

Here’s another benefit. If you don’t accept credit cards and your customer needs time to pay, you will need to extend the credit yourself, then hope you receive timely payments. Accepting cards also can lower overhead by eliminating the need to create and mail invoices and process payments.

Cards also allow you to sell to online customers around the world. Global sales present unique payment processing challenges. Whether your customer is a U.S. or overseas shopper on your website, you can process the transaction quickly and securely.

Debit card transactions offer additional benefits for your company, including the ability to sell to unbanked consumers who have access to pre-paid cards and payroll cards.

When you’re shopping for merchant services, look for a financial services provider that offers the most up-to-date security services to protect you and your customers. Also, look for free online reporting that gives you fast, safe access to transaction information, credit card funding, chargebacks and other reports, 24 hours a day, seven days a week. This allows you to reconcile accounts, generate reports, analyze trends and rates, and more – all online, when it’s convenient for you.

It’s clear, the benefits of choosing "plastic" as a payment option are substantial for you and for your customers. Talk to your banker to find out how you can take advantage of this valuable opportunity.

Contact Jill Malick, a business banking manager for Wells Fargo in Tucson, at jill.s.malick@wellsfargo.com or (520) 512-0301.