There is more than one method of payment that your business can benefit from. Although these methods are different according to the nature of the business transactions, they are still at your disposal if you prefer the benefits that one method can give you over the other. However, as a business owner who must be profit-orientated, your preference should be determined according to your customer’s needs. An accessible payment method will attract customers to buy your products/services with fewer complications, and this will have long-term, lucrative results on the success of your business.
What Are the Different Payment Methods?
When it comes to running a business, the smart thing to do would be to consider a variety of payment methods that you can utilize. There is a range of payment systems that you can choose from as a business owner: cash, credit & debit cards, online payments, cheques, vouchers, and digital wallets. With a good range of payment choices, you can assess what seems to be the easiest method/s that your customer prefers while making his/her transaction.
The main benefit that you can gain from the variety of payment methods is that you can attract customers from different backgrounds, especially if your transactions are running online, as people’s choice of a particular payment method is cultural rather than being personal.
Some people do not feel comfortable with cards, especially if they have to leave very sensitive personal, financial information. As data theft, financial fraud, and even POS hacking have become so common, transacting in cash is a great way to keep your digital wallets safe, both as a buyer or a seller. This category of clients often deal with items of small, manageable amounts, and this makes their keenness to pay cash-on-delivery (COD) more feasible rather than going through the risk of using their cards if they have any. This method involves simple, straightforward transactions. Customers from developing countries and rural, provincial areas normally prefer this method of payment, and it always brings good profit back in the business owner’s pocket. As a seller, you don’t have to worry about bank charges and digital transaction costs. Most COD service providers do offer insurance on their services so your money is secured. If you have your own employee who is collecting the money then this is a risk you will have to bear on your own.
This is a more sophisticated method compared to the one above. Though it is still used, it is not as common as it used to be like people who have the tendency to use this method would rather prefer digital payment, as it is less hassle and more instant. The problem with checks is that they can take at least up to 3 working days to clear. Yet, you cannot really eliminate this method as a possibility as long as it is an option used by your customers. Checks are still a very efficient method for high-value payments such as down payments on the property, buying and selling cars, or for the payment of any other high-value items. When paying with cash you don’t have any solid evidence for the transaction and credit cards don’t always permit such high-value payments. Using checks overcomes both these problems and since you aren’t dealing with cash currency you don’t have to worry about counterfeit notes either.
Credit & Debit Cards
This is a very conducive method for customers who are in possession of these cards. It is very easy and it is rather instant, and that is what makes people using this method tend to purchase more. Using credit and debit cards as a payment method in your business is indispensable if compared to many other methods. This method will definitely show its positive impact on your revenue in spite of the 2% you have to pay for the card company and the card reader that you need to buy to run transactions through this payment option. If your business is located in an international airport or a hotel or any other location where you have international clientele, credit card services are going to be an invaluable asset. Travelers don’t always have local currency but if they have any kind of international card, such as a Visa card or Mastercard, they can do business with you.
This is a very good solution for those who are keen to use their credit and debit cards but still feel uncomfortable sharing their details with a second party whom they do not know enough about. This method gives you the opportunity to gain customers’ confidence as they are using one of the reliable and renowned online payment methods. It shows also that you as a business owner are keen to protect your customers. Using well-reputed payment platforms and offering your customers a range of payment solutions adds to the credibility of your business. If you are operating online through an eCommerce store or a Facebook store being able to receive payments from all over the world is key.
Vouchers and Gift-Cards
This is a very effective, promotional payment method; it is used all year round, and it tends to have a very positive effect on sales as it is targeted to cater to the needs of customers during particular social occasions. In addition to the impact of this method on the profit margin, it helps to create a state of very positive rapport with the customers, as it helps in building their loyalty to you as a product/service provider.
With the widespread use of smartphones, this is another method that is becoming trendy and up-to-date. As much as credit cards are a conducive method for more spending and purchasing, so are digital wallets, which are becoming a faster method of payment and more enjoyable. Your business can certainly benefit from this method, especially that the customers who prefer this method of payment are technology-oriented, and this is part of their ostentatious consumption.
These are more or less the most common methods that you can adopt as a business owner, and you are free to either adopt them all, which in that case will give your business transactions a great deal of flexibility, or to adopt some that can benefit the givens you have within your business context. If you are looking to future-proof your business then you should definitely consider setting up cryptocurrency solutions for your business. As people move towards digital currencies and digital currency adoption rises with technology adoption, there is no doubt that cryptocurrencies will be an important consideration for businesses in the near future.
About the Author
Charles Dane is a strategic communication specialist. He has worked with several tech software startups that help companies attract new customers and keep current ones satisfied. When he’s not busy writing, you can find him studying interpersonal communication or reading contemporary literature.