4 Modern Payment Methods Every Small Business Should Accept
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The latest Annual Billing Household Survey said the typical consumer uses an average of 3.6 different payment methods every month. So, when the average consumer regularly uses about four payment methods, why should any business limit itself by accepting less than four types of payment?
Limiting payment options pushes customers away.
Work to attract customers and create new opportunities by accepting a variety of payment methods. Integrating online payment options can also create new efficiencies, especially for companies that send out field technicians, by eliminating the need to handle checks or constantly contact the main office to secure payment.
Payment technologies are evolving to offer businesses many ways to accept payment. And while there’s no reason not to accept cash, the greenback is still the most used form of payment for small transactions, in the U.S. cash accounts for just 9% of total payment value.
So, from credit and debit cards to new and exciting mobile payments, start accepting these four payment methods to win more customers, unlock new efficiencies and grow your business.
1. Credit and Debit Cards
Everybody expects businesses to accept both credit and debit cards. Don’t be an outlier; start by accepting those payments over your website.
This is the easiest place to start, but make sure you understand the differences between a dedicated merchant account and an intermediary holding account. Each account leads to different processes and funding times.
In exchange for increased sales and customer satisfaction, accepting credit and debit cards comes with one major downside: credit card company fees. Transaction fees typically range between 2% and 3%, however your particular fee structure may vary and could include monthly fees.
Despite the fees, small businesses should not ignore credit and debit cards. Credit is the preferred payment form for large purchases and many consumers rely on their debit cards for everyday necessities like groceries and gas.
Don’t let the fees scare you. Instead, tap into those sales and watch your business grow.
2. Online Payment Services
Online payment services make it easy for customers to pay you electronically. It’s a broad category and includes everything from PayPal to Venmo, and while it’s worth looking at all the options, many businesses benefit from adding a simple payment form or online store directly to their website.
Customers use payment forms and online stores to make accounts that save their payment information. This encourages repeat purchases and facilitates easy online payment.
This option is especially helpful for businesses that rely on technicians. Instead of having a technician waste time handling checks and dealing with customer payment, online services make the process easy and let technicians focus on their core jobs.
While many businesses are understandably wary about accepting paper checks, they’re outdated and there’s always the risk they will bounce, electronic checks are another story.
Other than being faster and 100% online, processing eChecks is similar to processing paper checks. All a customer needs to do is input their routing and account numbers, name, amount and authorization into an online interface. Payments are made over the ACH Network and typically take between three and five days to complete, and while merchants do pay a processing fee, eCheck fees are almost always lower than credit and debit fees.
Thanks to low fees and a simple structure, eChecks are popular for recurring payments like gym memberships, rent and legal retainers. They are also commonly used for expensive payments like mortgages and remodeling projects.
Although still relatively small, mobile represents the fastest growing form of payment.
A Forrester report said mobile payment volumes hit $112 billion in 2016 and are expected to grow 20% annually until they reach $282 billion in 2021. That type of growth shouldn't be ignored — businesses that swiftly adopt mobile payment solutions will be strongly positioned to acquire new customers.
Luckily for businesses, mobile payments are deeply connected to online payments. That means there’s often significant overlap when implementing the two payment options. There are also mobile apps that let businesses view their cash flow, send invoices and manage customer accounts remotely.
From the customer’s perspective, mobile payments one-up online payments in terms of mobility. Rather than needing to be at their computer, customers can simply use their smartphones to buy services and products on the go. That’s increasingly important given the growing workday and long commutes, dynamics that aren’t likely to change soon.
Whether you’re looking to boost efficiencies or attract more customers, today’s businesses need to accept a variety of payment methods. Online and mobile are the fastest growing forms of payment, and any business that refuses to accept them is limiting their potential. So, from longstanding payment options like credit and debit to newer, exciting online solutions, revolutionize your business by accepting as many payment forms as possible.