Getting paid as a small or middle-sized business can be a challenge sometimes. Delays can cause issues with the cash flow and the supply chain, not to mention having to chase people. You want a smooth process with no stress involved. So, what options do you have then?
Luckily, there are quite a few good options to ensure you get paid on time – or at least without facing too much stress. Here are some of the most popular options for what payment solutions you can adopt.
Card payments
There are no doubts about it – small business processing is one of your top options. Just take a look at the growing popularity of cards. Most people pay by card these days, whether it comes to customers or suppliers.
Surprisingly for some, there are still plenty of small businesses taking cash only, without realizing the amounts of sales they lose. People want convenience today, so they will rather go to a business that does not ask them to find the nearest cash machine to make a payment.
Consumers can also finance some large transactions, meaning small business owners have the opportunity to target a broader demographic. But then, just like any other option, this one is not perfect and may have some potential drawbacks.
For instance, you need to consider the fees associated with it, chargebacks, or even declined payments. Providing a secured payment method is important – there is plenty of fraud in the credit card industry.
Direct debits
It is difficult to beat direct debits when getting paid as a small business. This is one of the most convenient options for good reasons. This option allows you to pull payments from consumers’ accounts, assuming they have the funds.
Such transfers rely on the BACS network, which also guarantees top-notch security. Just like other similar options, direct debits will also allow one-off payments. Besides, you will manage to avoid some of the fees associated with credit and debit card payments.
Direct debits will also prevent all sorts of issues – such as late payments. They usually go on the same day of the month – or the next working day. This way, you can avoid the issues associated with late payments.
It is worth noting that direct debits usually take a few days to reach your account. If you require instant payments, this option may not be the best for you. Finally, the direct debit guarantee also gives payers a well-deserved peace of mind – no unauthorized payments.
Cash
Cash is still the preferred choice for many people, but it is seriously losing popularity in front of other alternatives. Its popularity decreased even quicker during the pandemic when people avoided touching things – including money. Card payments skyrocketed throughout these years.
Cashless payments have become the primary payment method, and this trend will not go away too soon. Sure, many businesses still accept cash. Costs associated with cash payments are lower – you might be charged if you want to put them in your bank account.
But then, cashless payments are preferred by accountants. Plus, again, businesses demanding cash only will end up losing customers. Apart from cash, cheques have also lost popularity, and chances are they will become history in no time.
Just like cash, cheques do not come with any upfront costs. But they bring in some risks – what if the cheque bounces? You may have an unnecessary headache and the need to chase payers around.
Digital wallets
Like cards, digital wallets are gaining more and more popularity, especially among small businesses. This option seems to be more common in startups, as well as service-oriented businesses – such as gardening or landscaping, for example. Digital wallets require a small upfront investment, though.
You will require a mobile POS – Point of Sale – to accept such payments. This system stores details and issues receipts. All in all, digital wallets allow people to pay without having a physical card – a contactless option that implies using a smartphone and NFC technology.
In theory, digital wallets are extremely convenient for payers. But then, small businesses will experience a few issues with them. For instance, you will face all sorts of fees, some of which are too high for a startup.
Other than that, there are lots of different digital wallets out there. Some of them can be integrated at a cost. Choosing the right one takes time and research. Moreover, you will need a reader to take these NFC payments, so keep all these things in mind.
Online payment gateways
Finally, if you provide a product over the Internet, you run an online store, or you want to give people the opportunity to pay online upfront, online payment gateways make a good choice. They represent a must for businesses taking payments online.
Their role is to ease online payments, and the checkout process can be completed directly on the website. Again, there are many different options here, and each comes with pluses and minuses – make sure you assess your business needs first.
Most differences will be in fees, prices, how you are charged, and the types of payments accepted over the gateway. Then, you need to think about the technical profile of implementing an online payment gateway.
Some of them allow sending customers to their websites for payment. Some others must be integrated into the design of your website – a bit difficult if you have no clue what you are doing, so you might need a professional.
These are the most common options for small and middle-sized businesses to take payments. There are a few other options, but most startups will do fine with one or more solutions.