Navigating through the world of ever-evolving payment options can be overwhelming. In order to make sure you pick the right payment options for your business, it’s important to carefully examine all of the options.
Here we’ll explore everything you need to know about accepting payments for your small business, ensuring your business thrives and leaves a lasting impression on your customers.
Why Contactless Payments are Here to Stay | The Best Options for Accepting Payments for Your Small Business | Small Business Online Payment Options Using Software Solutions | Small Business Payment Best Practices | Make It Easy for Yourself and Customers
The COVID-19 pandemic has significantly impacted the way businesses operate, particularly in terms of payment methods.
As the world continues to adapt to a post-pandemic landscape, contactless payments are poised to become the norm, making it crucial for businesses to embrace this technology to remain competitive and meet evolving customer expectations.
Contactless payments are increasingly becoming the preferred option for many consumers, as they offer a safer and more convenient alternative to cash and traditional card payments.
Some are initially resistant to adopting contactless payments; however, there are several compelling reasons why this payment method is here to stay.
In 2021, a survey by Mastercard found that most people around the world like to use contactless payments because it's safer and cleaner. A new study by Visa in 2022 showed that even after the pandemic, most people still want to use contactless payments.
Contactless payments minimize physical contact between customers and service providers, reducing the likelihood of spreading germs. This is particularly important for home services and small business owners, as they often work in close proximity to clients and customers.
Contactless payments are not only safer but also faster and more convenient than traditional payment methods. Customers can simply tap their card or mobile device to complete a transaction, eliminating the need to handle cash or insert a card into a reader.
Contactless payments offer enhanced security features, such as tokenization and encryption, which help protect sensitive customer data. As a result, the risk of fraud and data breaches is significantly reduced compared to traditional payment methods.
Mobile payment solutions like Apple Pay and Google Pay are becoming increasingly popular. These solutions rely on contactless technology, which means that businesses accepting contactless payments can seamlessly integrate mobile payment options.
When searching through all of the payment options for small businesses, it's crucial for business owners to understand the differences and choose the right options that cater to their customers' preferences while also streamlining their operations.
In this section, we will explore the best options for you to accept payments for your small business.
In-person payments remain an essential aspect of many small businesses, particularly for brick-and-mortar stores and service-based businesses where face-to-face interactions are common.
There are several options available for accepting in-person payments:
Offering a variety of in-person payment options, including credit and debit card processing, mobile payment solutions, and cash, ensures that your small business can cater to diverse customer preferences.
By providing a seamless and convenient payment experience, you can increase customer satisfaction, loyalty, and ultimately, your business revenue.
Debit and credit card payments are essential for small businesses, as they allow customers to pay using their preferred method, which can lead to increased sales and customer satisfaction.
There are a few main ways to accept debit and credit card payments:
A virtual terminal is a web-based application that allows businesses to process card payments without the need for a physical card reader. This option is particularly useful for small businesses that process payments over the phone, by mail, or for online orders.
To use a virtual terminal, you'll need to enter the customer's card information manually, and the payment is processed securely by the payment gateway.
Card readers are portable devices that enable businesses to accept card payments in-person by connecting to a smartphone or tablet. If your business needs a “swipe” solution, then card readers are best.
Popular card readers for small businesses might include:
Readers are the best option for retail and restaurants.
A point-of-sale (POS) system is an all-in-one solution that combines payment processing, inventory management, customer management, and reporting.
A few of the best POS systems for small businesses include Clover, Shopify, and Vend.
POS systems are ideal for medium to large businesses that require more advanced features and can benefit from an integrated system.
Bank transfers, often referred to as wire transfers or electronic funds transfers (EFT), stand out as our top choice for businesses due to their secure nature and virtually chargeback-proof advantages.
Here's what you need to know about accepting bank transfers for your small business:
These transfers allow for the seamless movement of money between bank accounts, making them an excellent option for businesses handling sizable transactions, recurring payments, or catering to international clientele.
Although cash is still a prevalent payment method, especially for small transactions or businesses in certain industries, it may not be the most ideal option for small businesses. There are several reasons why cash payments can pose challenges:
By reconsidering reliance on cash payments in favor of offering a variety of alternative options – such as credit/debit cards, mobile wallets, online transfers – small businesses can streamline their operations while catering to diverse customer preferences and providing a more secure payment experience.
The rise of e-commerce and digital technology has led to an increased demand for online payment options. For small businesses, offering convenient online payment solutions can help attract more customers, increase sales, and streamline operations.
Here are some popular software solutions for accepting online payments:
Cash apps have become popular among consumers for their convenience and ease of use.
Many small businesses have begun to adopt these apps as a way to accept payments online or in person, but they are not the best option for small businesses. They may be convenient – but when it comes to security and personalization, they are far outstripped by other payment options.
Many cash app vendors strongly discourage people from using their services for business purposes. Payments to wrong vendors and long holding periods are also prevalent for PayPal, Venmo, Kik, and other cash apps.
POS systems are effective, but are only necessary for brick-and-mortar stores.
Stripe is a popular payment processing platform designed for businesses of all sizes.
Key features of Stripe include:
Stripe offers a range of payment solutions, including online payments, subscriptions, and invoicing.
QuickBooks, a popular accounting software, also offers online payment solutions for small businesses.
Benefits of using QuickBooks Payments include:
QuickBooks Payments allows businesses to accept credit card payments and ACH bank transfers directly through their QuickBooks account.
GoSite is our all-in-one platform designed to help small businesses grow their online presence.
In addition to website building and marketing tools, GoSite offers a payment processing solution called GoSite Payments.
Features of GoSite Payments include:
By implementing one or more of our solutions, small businesses can offer their customers a variety of convenient payment options.
Implementing best practices for accepting payments can help small businesses reduce risks, improve cash flow, and maintain a strong relationship with customers.
Here are six payment best practices for small business owners:
Keeping accurate records of all transactions is crucial for maintaining your business's financial health and avoiding potential issues with the IRS. Avoid "under the table" or "off the books" agreements, as they can lead to miscommunication, disputes, and legal problems. Proper tracking also ensures you're prepared to handle any chargebacks that may occur, as you'll have a clear record of the transaction and related documentation.
By keeping detailed records, you'll be better prepared to dispute any chargebacks and provide evidence supporting your case. This can help protect your business's revenue and reputation.
For home services and skilled trades professionals, providing customers with an approved estimate before starting work can help prevent misunderstandings and ensure timely payment.
Source: GoSite Estimates
Once the work is completed, convert the estimate into an invoice and send it to the customer for payment.
Offering digital receipts not only saves paper but also provides a convenient way for customers to access and store their transaction records.
This function can help reduce disputes down the track and improve customer satisfaction substantially.
As more consumers rely on their smartphones for online payments – over 50%, according to DataReportal – offering mobile-friendly payment options can help improve the payment experience. Send invoices and payment links via text message, making it easy for customers to pay directly from their mobile devices.
Forgetful customers are the number one reason for late payments – but with reminders in place, they don’t need to affect you.
To improve your cash flow, send invoice reminders via email or text message, prompting customers to make timely payments. Automated reminders can save time and effort while ensuring consistent follow-up.
For home services and professional services businesses, requiring a deposit upfront can help secure the commitment from customers and reduce the risk of non-payment. Consider integrating an online booking system that allows customers to make a deposit as part of the appointment scheduling process.
In the end, the primary focus should be on offering the best experience for your customers. This includes providing a variety of payment options that cater to their needs and preferences, ensuring a smooth and convenient transaction process.