What’s the best payment solution for your business?
Payment methods
For quite some time, deciding how to accept payments for your small business was a simple matter: cash, cheques, or credit cards via a merchant account. However, although the digital revolution has provided customers with a greater range of payment options, it has also made things more difficult for retailers, particularly small businesses and online retailers.
Traditional credit card processing services are well-known to most businesses, and they now support a wide range of online payment and e-commerce solutions. Mobile payment options that utilise proprietary processing devices, smart cards, and touch-less terminals have proliferated in recent years, adding to the already lengthy list.
Small companies must now go through a rigorous data gathering and cost-benefit analysis process for any new payment method they participate in, which is fantastic news for customers. It’s a hefty load to meet all of these standards, which might change based on the payment method you choose and your specific business circumstances. The procedure of setting up payment solutions used to be much simpler. It was necessary to have a landline, rent a credit card machine, and then include in processing fees and other expenses when calculating the total cost of running your business. Many companies that offer mobile payment solutions are attempting to make the process more user-friendly, but the sheer amount of options may be overwhelming.
Choosing a cash register for your shop might be difficult given that most point of sale (POS) systems have gone digital as well. This is especially important if, like many companies today, have a physical store and an online store that both accept payments through. That’s because they want to be able to share more than just revenue statistics.
Those are the choices that are currently accessible. Markets and Markets predicts that payment processing solutions will reach $120 billion in revenue by 2025. When it comes to the many payment options available, this includes debit cards as well as credit cards as well as electronic wallets as well as ACH payments. Even though several factors are at play, it appears that the most important one is a shifting customer demand.
‘Today’s customer is all about ease,’ says Frank Pagano, Executive Sales Director of VizyPay, a small company credit card processing service. He believes that every small business, especially those that use mobile payment systems, such as Apple Pay, would need to provide a variety of payment methods. According to statistics produced by a market research agency, this conclusion appears to be correct.
Convenience is a major selling point for most developing payment options, and Pagano points out that “smartphones are continuing to become more widespread,” which eliminates the need to carry around cash or credit cards. As a result, relatively few small enterprises are able to ignore these emerging trends.
The Future of Payment Tech
The future of payments seems less like consolidation than it does competitive cooperation. It’s important to note that the speed of innovation in this field has sped up significantly, which means that you’re dealing with more complexity, but also an abundance of potential.
In a retail industry that has gone cashless in a blink, alternative payment rails may save firms a lot of money, says Smith. There has been a dramatic increase in the cost of processing both retail POS card-present transactions and mobile applications and e-commerce transactions, he explains. As a result, small firms are more open to new payment methods that claim to lower their operating expenses.
Transactions involving a card that is not physically present have a higher processing fee. Customers’ EMV (chip-enabled) credit or debit cards can be used fraudulently if a retailer cannot accept them for in-person transactions. According to Ted Rossman, the credit card analyst at Bankrate.com, a financial services company, “that implies you need to make sure your payment processing is in compliance with all of the proper standards.”
Despite banks’ best efforts to act as a payment solution intermediary for small businesses, you’ll almost certainly be on your own when it comes to determining what works best for your company. Small firms have two major obstacles in this situation: To begin, you must decide which payment options are most appropriate for your company right now. Next, you must ensure that the decisions you make do not restrict your ability to respond quickly to new payment possibilities as they arise.
It’s important to keep costs in mind while deciding what’s best for you right now. “This was my hardest hurdle overall,” says the owner and operator of AutoNiche – a Canadian vehicle repair company. According to her, “these are charges that the end user doesn’t notice. In order for us to take credit cards, we are neither authorised to deny premium cards, nor can we charge a fee for doing so. As a result, whether she likes it or not, her firm will be saddled with fees from credit card processors.
Customers may not be aware of these charges, yet they can have a substantial impact on the firm. Debit card processing costs Chung’s firm less than $3 per month, while credit card processing costs her company hundreds of dollars each month, she adds.
The whole cost of ownership must be considered when selecting payment alternatives for organisations. ‘Free’ payment terminals may come with greater processing expenses or a pricey long-term commitment,’ warns Bankrate.com’s Rossman.
It may also be more expensive to lease a terminal rather than to purchase one altogether.” “He goes on. “You should compare the per-transaction processing costs, hardware costs, and any extra fees or subscriptions on an apples-to-apples basis. Finally, take into account the length of your engagement.”
You’ll likely be influenced by your company practises as well. A processing terminal isn’t necessary for retailers that solely operate online; nevertheless, a solution that supports both online and offline operations is required by businesses that operate in both environments. Mobile payment systems that support mobile terminals linked to tablets or smartphones are increasingly popular because they allow sales employees to engage more freely with clients in physical stores, which is another strong signal.
As soon as a company gets started, it may be tempting to look for a certain payment method. If you take a step back and look at the problem you’re trying to solve, you’ll see that it’s crucial. The location of your clients and how they choose to engage with your business must be considered. The next step is to figure out how you’ll charge them and collect money. You may next begin looking for solutions that fit that criteria.