Best Payment Options For Small Business

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How your small business handles payments is once a fundamental decision: cash; checks; You already process credit cards through a merchant account. But while the digital age offers customers a lot of flexibility in how they can pay, This makes the process significantly more complicated for merchants, especially for small shops or online retailers.

Best Payment Options For Small Business

Best Payment Options For Small Business

Most merchants are now familiar with traditional credit card processing services that power many online payment and e-commerce solutions. However, in recent years, processors; This list is getting longer due to the rapid proliferation of mobile payment methods that can use smart cards and contactless devices.

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All of these options are great for consumers, but this payment trend now means that small businesses must go through a lengthy claim collection and cost-benefit process for each new payment method they engage with. These requirements vary depending on the payment method and your specific business situation, so this can be a heavy lift. Previously, Setting up payment solutions is a simpler process. You must have a landline, rent a credit card machine, and factor in the cost of doing business and other fees. Mobile payment providers are working to make the implementation process easier for small businesses, but the number of options can be daunting.

And now that most point-of-sale (POS) services have gone digital, even choosing your store’s cash register can be confusing. Especially like today’s merchants. Your brick and mortar store is supported by an online store that requires two payment systems to communicate. This means they can share not only revenue data but also inventory and customer information.

These are just the options currently available. According to research by research firm Markets and Markets, payments solutions are expected to grow to $120 billion by 2025 (opens in new window). This includes debit cards; credit cards; e-wallets; Includes ACH payments (opens in new window) and some other methods that have not yet been released. The report cites several economic drivers influencing this change, but ultimately the main driver appears to be changing consumer demand.

“Today’s consumer is all right,” says VizyPay (opens in a new window). said Frank Pagano, head of sales at the payment card processor for small businesses. Offering multiple payment options is important for all small businesses, according to market research firm Statista (opens in new window).

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“Smartphones continue to be ubiquitous,” Pagano said. This eliminates the need to carry cash or credit cards. Such convenience will be very attractive to your customers, and convenience is the focus of most new payment methods. That is, This means that small businesses cannot afford to plan for this trend.

“The future of payments is less about consolidation than competition,” says Austin. said C. Eric Smith, CEO and co-founder of TX-based payment technology company AppBrilliance (opens in new window). The pace of innovation here has accelerated significantly; That means you’re facing not only complexity but also opportunity, he notes.

“Alternative payment channels can provide significant cost savings to businesses in a retail economy that is rapidly transitioning to cashless operations,” explains Smith. He points to the cost of payments for card-based and non-card-based retailers. Payments via mobile apps and e-commerce platforms (opens in new window). This has forced small businesses to take a hard look at payment innovation that promises to reduce costs.

Best Payment Options For Small Business

Card payments usually have higher processing costs than card transactions. In addition, Merchants are vulnerable to fraud if they cannot accept a customer’s EMV (chip-enabled) credit or debit card for in-person transactions. “This means you need to make sure your payment process complies with all applicable regulations,” says Ted Rossman, financial services provider at (Opens in a new window).

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“Affirm, With the emergence of companies such as Afterpay and Klarna, ‘buy now’ Another big trend in ‘pay later’. PayPal has PayPal Credit and PayPal Pay 4 ‘Buy Now’ There are many ‘pay later’ options,” Rossman continued. This may be because data shows that customers spend more when using this type of service, according to his research.

A recent and significant influence on payment trends; Yes, COVID-19. “Because of the pandemic, contactless payments have become essential,” says VizyPay’s Pagano. Not because companies have to respond to relevant customers. Touchpad-like measures are mandatory in many places due to security regulations by state or local governments. If you are operating in one of these areas; You will need to meet these requirements if you want to keep your doors open until at least next year. This has led to a surge in demand for contactless payment systems, and once consumers get a taste for its convenience, these systems are unlikely to go away even after the threat of COVID-19 fades.

While banks are trying to respond to the needs of small business owners by acting as an intermediary for payment solutions. You may need to find out for yourself what works best for your business. The big challenges for small businesses here are two-fold: First, You need to decide which combination of payment solutions will work best for your business today. Secondly, Whatever option you choose now, you need to make sure you don’t lock yourself into one set of services, so that they can’t respond quickly to new payment options.

A big consideration in finding what’s best for you right now is cost. Canada Emily Chung, owner and operator of AutoNiche (opens in new window), an auto repair shop in Ontario, says this is her biggest challenge. “It’s a cost that users don’t see,” she said. “We don’t allow premium cards to be declined, and we can’t add an extra fee to accept credit cards.” That means her company faces mandatory fees imposed by credit card processors, whether it likes it or not.

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Although invisible to customers, these costs are important to the business. Chung says his company spends less than $3 a month to process all of its debit card transactions, but hundreds of dollars a month to process credit card payments.

“Companies must consider total assets when evaluating payment solutions. for example, “Sometimes a ‘free’ payment gateway comes with high processing costs or an expensive long-term contract,” said’s Rossman.

“Renting a terminal can be more expensive than buying it outright,” he added. “It should be an apples-to-apples combination of the cost of processing each transaction, as well as the cost of the relevant hardware, along with other fees or subscriptions.” Then assess whether you’re making a long-term or short-term commitment.”

Best Payment Options For Small Business

You will also have a strong sense of how you do business. for example, Although online-only stores don’t need a processing center, they do. Stores online and in a physical location will need services that support both environments. Customer interaction is another good indicator; In particular, payment systems that support mobile terminals connected to tablets or smartphones are becoming increasingly popular because they allow salespeople to interact more freely with customers.

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“Many companies may be tempted to immediately find a specific payment solution. However, “It’s important to look back at what you’re dealing with,” says Pranav Sood, GoCardless’ VP of Small Business (opens in new window) to help small businesses get paid with direct debit. Analyzing how your business operates. That means considering where your customers are located and how they want to interact with your business. Then deciding how you need to collect payments. (opens in new window); Visa Solutions is a payment gateway provider. This means focusing on allowing merchants and businesses to securely accept credit cards and electronic checks through e-commerce websites. Although not a household name. has been a payment processor for a long time and has the customer list to prove it.

However, That maturity is also reflected in its payment service offering, which until recently focused primarily on well-established payment technology.

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