Payment processing may have never been something that small businesses need to worry about. For most startups, cash has always been the mode of payment. However, the pandemic has forced everyone to choose contactless payment methods. It seems like the statement “Cash is king.” no longer holds for small businesses – at least for now.
Be that as it may, several factors still come into play when considering the best payment method for your business. Some of those factors you need to consider include the size of the transactions made, your accounting system, and who’s handling the money, among others.
To help you decide, here are some of the payment processing options that you can choose from:
Types of Payment Methods for Small Businesses
One of the decisions you need to make is to establish the payment methods that your business will accept. Here are some of the options:
Cash
Cash payments are made with coins and bills. This has always been the primary mode of payment for small businesses until recently. However, due to the pandemic and the rising popularity of digital payment, this is slowly changing.
One of the benefits of cash payments is that small businesses receive their customers’ payments immediately instead of waiting for the clearance of transactions. Cash payments also help reduce overhead costs as there are no extra fees when you accept cash from customers.
There are drawbacks, too. For one, there’s a higher risk of theft or mismanaged funds. There’s also the possibility of losing business when you can’t accept customers who only pay with their cards.
Card Payments
Offering a card payment option can be very beneficial to your business as many customers prefer this model. Additionally, this method also helps legitimize your business. It may also help you improve the company’s cash flow as card payments are directly deposited into your bank account. It is worth noting that there is a cost for small businesses when they choose card payment.
For example, flat fees, transaction fees, and incidentals can affect your budget unless you pass those expenses to customers. The rates depend on the company. You’ll also have to pay for the cost of the physical equipment as well as merchant services and charges for PCI compliance. You may also have to reach monthly minimums.
Online and Mobile Payments
Online and mobile payments are made electronically with the use of payment gateways to authorize certain types of payments including direct debit payments, credit cards, and eChecks. Online payments are not restricted to eCommerce businesses but may also be used by physical stores through digital wallets or smartphone apps.
These modes of payment can help you get more customers and simplify your payment process at the same time. However, because there are several online payment options out there, you should be careful in choosing the right solution that suits your needs best. Check the features, security, and pricing. Also, see if they’re flexible enough for your needs.
Conclusion
Choosing the suitable payment processing for your small business is vital as this will affect your customers significantly. While you should still accept cash as a payment method, you should make sure that it’s not their only option. Consider the pros and cons of offering card payments as well as online or mobile payments. If you need more information, you should also talk to experts in payment processing to understand this better.
ProSource is one of the most trusted experts in payment processing in Wisconsin. Contact our team today to know more about our services that your small business can benefit from!