Businesses are widely growing in 2022. There is not one but many types of companies that people are running using their innovative thinking. However, one thing that requires most of your attention is the payment options.
Some say that cash is the king for small businesses, while others opine that credit and debit card payments are to swear by for better results. It is about offering convenience to your customers and making easy payments while keeping your expenses in mind.
Each payment method requires you to spend some amount to avail of the services. Thus, calculate the expenses and choose as many payment options as possible for your customers. According to a report, around 78% of retail payments were made through debit or credit cards. But you must ensure that you have the best and easiest payment options for your consumers.
The lack of convenience can lead to losing potential customers. We’re sure you don’t want that.
So, what are the best ways that small businesses can offer their customers the ease of using payments? Well. We are here to help. In this article, you will find various types of payment options and their benefits for your business.
What are the different types of payment methods that small businesses can use?
As the world of technology is growing, you get access to different payment methods. Whether you want to create an online store, an offline store, or both, you can decide front the following:
- Credit/ Debit Card
These are the most convenient options for consumers. However, many businesses pick two or three from these, while others offer all 5 of them to consumers for their convenience. Let us understand them in detail and learn their benefits for the company.
1. Credit/ Debit Card
According to research, consumers love to use card transaction options to pay for services. It is because card payments are comparatively safer than online payments. Interestingly, it is globally the second most used method after cash. It allows the customers to make purchases of large amounts. Thus, they wish for companies to accept at least one kind of card.
To accept card payments, you have to open a merchant account with a bank or get a third-party transaction processor. When you set up a merchant account, you have to pay a minimal service fee; it will differ depending on the card network, issuer, and method of entry. Interestingly, card swipe machines are available for particular businesses to grow revenue.
For example, if you are a cannabis retailer or run a dispensary, you can get access to a particular payment system designed solely for this business; learn more here.
In simple words, you get your hands on a POS system to improve your sales. You get a POS system that tracks products, sales history, and inventory. Likewise, you will get a Card Reader to swipe the customer’s card for a contactless transaction.
2. Check Payments
Check payments allow customers to mention the receiver’s name, account number, amount, and date. It authorizes the bank to transfer funds to the aforesaid person. Traditionally, these were widely used; however, digital payments have reduced popularity. Thus, e-checks are now used as alternatives to traditional paper checks.
The checks are not entirely outdated however are comparatively costlier than other payment methods. You may accept an e-check or paper check written in the exact amount with the date. However, you will need a third-party service to review the bill’s legitimacy.
If the check bounces, you can use laws to get the money or talk to a collection agency to help you. This payment option is popular with small businesses, such as rentals and lawn services.
3. Cash Payment
The most used transaction method worldwide is cash. People use bills and coins to complete their purchases. It is more straightforward and beneficial for all businesses, regardless of size. You do not have to wait for the transactions to clear; instead, you receive immediate payments.
Also, it is easier to manage cash flow; you can also use a POS system. Gradually, as your business picks up the pace and you are getting considerable profit, you may want to integrate card payments for consumer ease. Running a cash-only business is good until you have streamlined the responsibilities.
Ensure you have proper security systems to prevent theft or burglary. Additionally, more cash can mean high odds of money mismanagement. So, ensure to use diligent accounting to get decent tax benefits while preventing any loss to the business.
4. Online payments
As the name suggests, these are made through online mode. It may be completed on a laptop, mobile phone, or computer. Online payments use a gateway to facilitate the process with additional fees. For instance, you can accept credit/ debit card payments and e-checks through the payment gateway.
Interestingly, these are not limited to online stores but are widely used in brick-and-mortar stores for customer convenience. For instance, by using wallets & apps that store debit/ credit card information. These are the future of payments in every industry in terms of convenience and cost.
E-commerce sites use virtual carts to calculate the total amount. Later they collect the money through various payment gateways for consumer ease. These are safe transitions; however, you must ensure that you make payments using a protected network.
5. Mobile payments
There are some advantages of mobile phones in business. Customers can use their smartphones to make payments for their purchases. It can include a wide range of payment options such as near-field communication technology, wallets, money transfer apps, or card readers to scan the card information.
The younger age group is now using more mobile payment methods for shopping, be it at the grocery store, for car repair, or for hospital bills. It is undoubtedly the most preferred way of making secure payments. Platforms like Apple Pay, Samsung pay, and Google Pay are the most used apps and digital wallets to make purchases.
Surprisingly, the older gen is also learning to make secure transactions using the mobile payment method. Thus, decreasing the risk of carrying heavy cash to the market. It comes with less cost for businesses, therefore being widely accepted.
Running a small business requires you to do everything that increases your brand value and satisfies your customers the most.
You aim to provide the best products and services. However, many people ignore the primary factor of customer satisfaction; convenient payment options.
We hope the information above helps you choose the best methods for your business and grow your benefits manifold.