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Not accepting plastic hurts small businesses

Intuit Inc. has released a new survey showing that for all the buzz about mobile POS opening up electronic payments to dog walkers and lawn care services, a large number of these small businesses still don't accept credit cards. According to the survey, 55 percent of the nation’s 27 million small businesses don't take plastic.

Those nearly 15 million businesses miss out on a potential $100 billion in sales every year, Intuit said. It estimates businesses that don't accept credit cards lose $7,000 in sales annually. This missed opportunity represents a combination of new sales and sales that go to other businesses that do take plastic.

What's more, the survey found that 83 percent of businesses that accept credit cards actually make more sales, with 52 percent reporting at least $1,000 more per month in additional sales and 18 percent making at least $20,000 more per month.

Along with lost sales, Intuit said cash flows for small businesses are severely limited by waiting on payments that could be handled using credit cards. The average, according to Intuit, is $5,140 per month in overdue payments, or $1.7 trillion in "collective cash flow strain" across small businesses every year.

Seventy four percent of survey respondents reported they get paid faster and reduce bad debt by accepting credit cards.

The Intuit Small Business Survey was an online survey of 1,000 small businesses in the U.S. compiled for Intuit by Decipher Research in November 2011.

For more stories like this, visit the Trends/Statistics research center.