If it’s your first time owning and managing a business, you might think it’s okay to accept any form of payment as long as you’ll be paid. But it would help if you kept in mind that that is a dangerous practice. Note that there are several types of payment.
Some can be less trustworthy; some are less valuable. If you accept different payment forms, then you’re putting unnecessary risk on your small business, which is facing so much risk already. Before allowing your clients to pay in any method, you should first know the pros and cons of each type of payment.
Cash is the first payment method generally used in any business. This used to be the most dominant and most used form of payments. However, it’s slowly becoming less and less ideal for younger customers. Cash is commonly used for small-value transactions.
One advantage of using cash as a payment method is that you will not spend a single centavo for processing. All you need to do is to collect the cash payment then deposit it in your bank account of your business.
But the of this payment method is that it’ll be harder to trace transactions causing problems during audits.
This type of payment method is not as ideal as cash or other payment types. This is because checks are risky or both the business and customers. Checks contain various sensitive information, such as addresses and account numbers. This means a misplaced or lost check could expose the customer to identity theft.
Also, faking checks are very easy, and only a few stores and businesses can identify the signs of fraud before they’re affected. And checks take some time to write. Only a few businesses will agree to wait. If you’re not a B2B, you can decide not to accept checks. It will be better for your business.
Remember that all kinds of plastic payments are expensive for the business. For example, a debit card charges 21 cents and an additional .05% of the purchase. A credit card can charge more than 3% of the purchase.
As you can see, there are over 500 million debit and credit cards circulating in the United States alone. This only shows that it’s unwise not to accept plastic payment in your business. You don’t need to worry about anything.
All you need to do is to search for the best merchant account service providers so that you won’t have any trouble accepting credit cards.
Major tech empires such as Apple and Google anticipated mobile payments to transform business. However, the adoption of mobile payments has been relatively slow. But the use of mobile payments is still expected to increase as Gen-Z starts to claim more purchasing power.
As of now, about half of the American population is already using their phones when making purchases in stores. Although you don’t need to rush and accept mobile payments now, you still need to make sure you will be able to accept payments via mobile by 2021.
You can choose which type of payment you will allow in your business. All you need to do is to make sure it is convenient and preferred by your consumers. Try doing some surveys as to what payment method is mostly used or liked by customers.
Note that if your customers find it inconvenient to make payment with you, they’ll look for other businesses that can provide easier payment transactions.