Five Payment Options Every Small Business Should Consider
As a small business, one of the primary ways you’ll strive to differentiate yourself from the behemoths is by providing better and more personalized customer experiences. This translates to better product options, quality service and support, and improved user experience, as well as flexible payment solutions. The payment method your customers prefer depends on a variety of factors, including familiarity, convenience, tax implications, and so on. As a growing business, you can’t afford to alienate potential customers, simply because you haven’t configured a payment option.
The one common thread across customer payments, especially post the arrival of the pandemic, is the wholesale transition to online payment options. According to a survey, by 2022, over 82% of payments for all goods in the U.S. will be via digital means. With that in mind, we’ve compiled a list of online payment solutions that you, as a small business owner, should consider offering your customers.
Credit and debit cards rule the roost when it comes to customer payments – by a lot. A whopping 67% of all point-of-sale payments in 2020 were made by credit or debit cards. Most businesses today accept at least one type of card and customers are accustomed to paying with them for the convenience they bring in financing and deferred payment options.
They’re an attractive payment solution for businesses as well, since card payments don’t take long to deposit into your account and help improve your cash flow. However, there is a cost attached too, namely the interchange and assessment fees charged by processing networks like Visa and Mastercard. On average, you’ll be shelling out 2.75% of the transaction value, plus another $0.15 for every transaction. Depending on how many transactions you have, this can be an expensive online payment option, especially for a small business.
EChecks are basically digital versions of the paper checks you’re used to. As a payment solution, they’ve gained a lot of ground in recent years. Switching to electronic checks means you eliminate the long wait times associated with paper checks as they arrive by post and are then manually processed to facilitate the deposit. EChecks are processed entirely online and there’s no chance of them being waylaid in the mail. With eChecks, you only need authorization from your customers once, and then the bank and routing numbers can be used to process recurring payments over the Automated Clearing House (ACH) network.
With the right payment solution provider, you can get even more out of your eCheck payments. Seamless Chex, for example, offers you instant bank balance verification, which means your checks never bounce. You benefit from next-day funding and affordable, flat fee pricing, releasing you from considerations like the volume and size of your transactions.
Increasingly, more and more businesses, both B2B and B2C, are turning to mobile payment solutions, and with good reason, too. Mobile POS payments are expected to grow by over 30% annually, to reach over $2 billion by 2023. Mobile online payments options are numerous, including digital wallets and money transfer apps. If you have a physical storefront, you could also use near-field communication (NFC) technology or employ mobile card readers or accept credit card payments via smartphone. In general, contactless payment solutions, like those facilitated by NFC are ever more popular with the advent of the pandemic.
ACH or Automated Clearing House is a financial network that facilitates payments for businesses, individuals, and governments all across the U.S. ACH payments essentially mean you’re transferring money from one bank account to another without using paper checks, cash, credit card networks, or wire transfers. They’re a direct payment solution, slower than wire transfers, but considerably cheaper. Most ACH processors will charge you a flat per-transaction rate, usually around 1%. Seamless Merchant does even better, with volume pricing suited to every conceivable business operation from independent contractors to large corporations.
Online Payment Gateway
Even if your business isn’t necessarily an e-commerce store, but a service-based company offering therapy, online tax returns, meal plans, or any of a multitude of other services, a digital gateway is a great online payment option to have. You can integrate a variety of payment solutions into it, offering your clients convenience and an incentive to keep returning to you.
There’s a lot that goes into your decision-making when configuring payment options. They’ve got to mesh well with your business model, accounting system, data security provisions, and more. At the end of the day, it boils down to how you choose your payment processing partner. With the right company, you’re likely to see efficiencies and a windfall of savings to help streamline your operations and future-proof your small business.
Still wondering which is the best online payment option for you? Take our quiz to discover the best payment solution for your business, or simply reach out to us for a consultation. We’ll be happy to advise you.