As a business owner, you want to make it as easy as possible for your customers to purchase your products or services.
One way to do that is by offering multiple payment types. But with so many options available, how do you decide on which payment types to offer?
In this article, we’ll help you answer this question by exploring some of the most popular payment types your business should accept and outlining why it might be prudent to do so.
Why Is Accepting Multiple Payment Methods Important?
Accepting as many different payment methods as possible for your business is important for several reasons.
First and foremost, doing so makes it easier for customers to purchase your products or services. Customers have different preferences when it comes to payment methods, and by offering a variety of options, you can cater to those preferences and provide a more convenient shopping experience. This, in turn, can lead to increased customer satisfaction and loyalty.
In addition, accepting multiple payment methods can help increase your sales. If a customer is unable to use their preferred payment method, they may choose to shop elsewhere, resulting in lost sales for your business. By offering a range of payment types, you can reduce the risk of lost sales and increase the likelihood that a customer will purchase from you.
Furthermore, accepting multiple payment methods can help you reach a wider customer base. For example, if you only accept cash or cheques, you may miss out on customers who prefer to use credit or debit cards, mobile payments, or online payment platforms. By offering a variety of payment options, you can appeal to a broader range of customers and increase your chances of attracting new business.
What Different Payment Methods Can My Business Use?
In today’s commercial world, there are several different payment methods your business can use. These include the following:
Cash is the most traditional and straightforward of all the different payment types available.
Accepting cash can be an excellent option for small businesses, as it’s easy to process and doesn’t come with any transaction fees.
However, it’s important to keep in mind that accepting cash can also come with risks, such as theft or counterfeit money. It also involves depositing the money at your bank.
As a result, it’s important to have secure cash handling procedures in place.
Cheques are another traditional payment type that can be a good option for businesses that work with larger transactional values.
While they require you to go to your bank to cash them in, they can provide a paper trail for record-keeping purposes.
However, accepting cheques can also come with the risk of them bouncing or being fraudulently written. Additionally, they can also affect your cash flow as they typically take between 3-5 days to clear.
For this reason, cheques are becoming a less popular payment method for businesses to accept, with many preferring EFT payments instead.
Electronic Fund Transfers (EFTs)
Electronic Fund Transfers (EFTs) allow customers to transfer funds directly from their bank accounts to a business’s bank account.
It can be a cost-effective and secure option for businesses that work with larger transactions. It can also save you some money on bank processing fees.
If accepting EFTs, you will need to double-check all incoming payments against the invoices you have issued, to make sure they have been paid.
It is also advisable not to send out any products to customers until the money from an EFT transfer has been registered into your account.
Credit cards are one of the most popular payment types for businesses to accept. They offer convenience and security for both the customer and the business.
They can also help increase sales by allowing customers to make purchases they may not have had the funds to pay outright for otherwise.
However, credit card transactions come with processing fees that can eat into a business’s profit margins. Therefore, it is important to research different credit card processing companies to find the most cost-effective option for your business.
Debit cards work similarly to credit cards but are linked to a customer’s bank account rather than a line of credit.
They are a good payment option for businesses to accept as some customers may prefer not to use or even have a credit card.
Additionally, debit card transactions also often come with lower processing fees than credit card transactions, making them a more cost-effective option for businesses as well.
Mobile payments are becoming increasingly popular as more people use their smartphones for everyday activities.
To accept mobile payments, you will need to set up a mobile payment processor, such as Apple Pay or Google Wallet.
These services allow customers to pay using their mobile devices, making the checkout process faster and more convenient.
Mobile payments are particularly useful for businesses that operate in physical or outside locations, such as retail stores or market stalls. By offering mobile payments, you can reduce the amount of time customers spend in line and improve the overall customer experience.
However, like credit and debit cards, mobile payments usually come with processing fees. So, you must be mindful of that should you accept them.
Online Payment Platforms
If your business operates online, you will need to offer online payment options. They include payment gateways such as PayPal and Stripe, which allow customers to pay directly on your website using a credit or debit card.
They can be a convenient option for businesses that sell products or services online, as they often come with built-in security features and can help reduce the risk of fraud.
To accept online payments, your website should have an SSL certificate. It is worth implementing other measures to enhance its safety as well. Doing so will best protect your customers’ payment information and ensure that their transactions are processed securely.
Again, these online payment platforms also come with processing fees. However, if you are open to shipping orders to overseas customers, using this method can significantly increase your potential for sales.
E-wallets are digital wallets that allow customers to store payment information and make purchases with just a few clicks.
Some of the most popular e-wallets include PayPal, Google Wallet, and Apple Pay. These wallets can be linked to a credit or debit card, or they can be loaded with funds using an Electronic Fund Transfer.
E-wallets are particularly useful for businesses that operate online because by offering e-wallet payments, you can provide customers with a fast and convenient checkout experience.
MOTO payments stand for Mail Order/Telephone Order payments. They are a type of payment where a customer provides their payment information over the phone or through mail order.
These types of payments are commonly used by businesses that do not have a physical store location, such as online retailers or service-based businesses.
To accept MOTO payments, you will need to have a merchant account with a payment processor that supports MOTO transactions. You also must have a system in place for securely processing and storing customer payment information.
MOTO payments can be a valuable option for businesses, particularly those that operate in industries where physical payment methods are not possible.
If you are not familiar with them, this Smartpay moto payment guide provides more information.
Cryptocurrencies, such as Bitcoin and Ethereum, are newer forms of payment that are slowly becoming popular with businesses.
They offer fast and secure transactions and can be a good option for businesses that work with international customers.
Some companies that accept cryptocurrency as payments include major players like Microsoft, Starbucks, PayPal and Whole Foods.
However, some smaller-sized businesses have started to accept them too, which may surprise you. In Australia, this includes the IGA X-press Bowen Hills in Queensland, as well as Forsyth Real Estate in New South Wales and The Little Mule cafe in Melbourne.
However, cryptocurrencies are still relatively new and can be volatile in value. So, you need to do thorough research and understand the risks associated with accepting cryptocurrencies before deciding to offer them as a payment type in your business.
In business today, there are more payment methods available for companies to use than ever before.
From traditional cash and credit cards to more modern methods like Moto payments and cryptocurrencies, the choices seem endless.
Not all methods will be appropriate for your company. But the more options you can feasibly offer them, the easier it will become for your customers to purchase your products or services.
And at the end of the day, isn’t that what every business should aim for?