If you are a new small business owner, you might probably attracted to say that you will accept any type of payment, as long as you get paid. However, this is a risky model to set. Payments come in all forms, some are less valuable and some are less than trustworthy, and through accepting a few types of payments, you might be getting pointless risk onto your already risk-filled small business.
Before you allow your customers to pay any which way, you should understand the perks and drawbacks of various types of payment methods — and this article should help small business throughout all type of payment methods.
Bartering is the oldest method of payment. Although you might consider bartering to be a practice more suitable for businesses within the past, many startups and small businesses can get benefit through trading services and products with other businesses. For instance, in case you are a new online marketing company, you might provide a photographer a new website in exchange for their shooting of your publicity pictures. Luckily, most of the customers are more than happy to pay the using more traditional payment methods, therefore bartering payment method is no more an option for businesses in current ages.
Cash is slowly going out of trend at present with more young consumers. Still, unless your small business only manages extraordinarily high-cost invoices, you ought to be willing to accept cash. The exquisiteness of cash is that it charges nothing to process; you simply collect cash payments and deposit them into your business bank account. But, you should be diligent to document your cash payments because the IRS audits pay close attention to cash transactions, or even some bucks unaccounted for could land you with substantial fines.
- Money Orders
As the check payment method, money orders are paper documents that are used to make payments. In contrast to checks, money orders are methodically secure, issued only after a customer has extended the money represented on the order. Money orders are noticeably uncommon and rare types of payment, most often noticeable amongst low-income customers. You need to learn how to confirm the appropriateness of money orders before you accept them.
Checks are far from an ideal form of payment. In general, they are perilous for customers and businesses alike. There is some sensitive information printed on checks, such as account numbers and addresses, meaning a misplaced test could expose a customer to identity theft. In the meantime, checks are remarkably easy to fake, and some businesses can apprehend the signs of deception before they’re affected. Additionally, checks take more time than any other payment methods, and some businesses are ready to wait.
- Credit Cards
Any kind of plastic (card) payment is expensive for almost all type of businesses. A debit card costs almost 21 cents, 0.05 percent of the transaction and a credit card can cost more than 3% of the transaction. Given that you do your research on inexpensive and affordable merchant services, you should be able to accept credit cards as a way of payment without any problem in your business.
- Mobile Payments
There are many tech leaders who are accepting mobile payments to modernize business, actually the mobile payment usage is slow specifically in businesses. Still, about half of US citizens have used their smartphones to make purchases in eCommerce stores, and as Generation-Z starts claiming more purchasing power and accessibility, you must expect to see the use of mobile payment go through the ceiling. It is good to in place mobile payment methods in your business as more and more businesses are implementing this type of payment method in their businesses.
Bitcoin is a type of cryptocurrency and the interest in the Bitcoin and some other cryptocurrencies have been surging high and high; however after the recent Bitcoin market crash, everyone has been looking forward to buy more and more digital currency.
Luckily, it seems that most consumer view cryptocurrency as a capricious funding as opposed to a realistic payment method, so it’s improbable that you need to discover a way to accept cryptocurrency as a payment method in your business any time soon.
Automated Clearing House (ACH)
ACH or Automated Clearing House payments is a payment method. This payment method connect bank accounts with the billing accounts. Therefore, the payments in this program are made automatically. Frequently, this ACH is used for regular payments for services. For instance in this method, business’ direct deposit is an ACH payment made to workers. This type of payment method is preferred by freelancers, who should ask for ACH payment from their customers because it is deemed the fastest payment method, which is secure and inexpensive as compared to other payment methods.