A Breakdown of the Different Payment Methods for Small Businesses

No matter if you own a coffee shop or provide tech solutions for clients around the world, you’ve got a lot on your plate as a small business owner. As a result, it’s critical to find ways to streamline daily processes for you and your team–including payment processing.

Even so, you may not be familiar with advanced small business payment methods that use new technology to simplify the process. These new payment processing systems allow you to manage financial data, create procedures that make your employees’ jobs easier, and track credit card, cash, or check payments on the go.

Most importantly, you can simplify in-person and online payments for you and your customers–making it a win-win for everyone. Read on to learn more about small business payment options, courtesy of our team at Weave.

What Are the 4 Common Forms of Payment?

Before you begin exploring new payment processing options for small businesses, it’s critical to determine which payment methods you plan to accept. For example, some small businesses prefer to avoid credit card payments due to credit card processing fees.

Others haven’t set up mobile payment tools like Google Pay or Shopify Payments. Finally, many small businesses no longer accept check payments to improve their cash flow and reduce the risk of a bad check. With that said, consider the four most common ways that small businesses accept payments, then determine the best payment gateway tools to satisfy your customers and support your business.

1. Cash Payments

Shoppers have made purchases with cold, hard cash for centuries. Virtually every small business will accept payments made with cash. In fact, until the rise of digital payments, consumers used cash more frequently than any other type of payment.

Cash offers several benefits, including easy tracking, no processing fees, and higher bank account balances for your company. However, cash-only businesses may lose sales, especially as more shoppers turn to credit cards or mobile payment methods. Further, cash-only businesses face a higher risk of theft.

2. Digital Payments

Digital, or online, payment systems have become increasingly popular in recent years. While online payments vary in form, they often rely on a digital payment gateway or wallet, a type of app that securely stores credit or debit card information on a mobile phone.

In many cases, customers can scan a barcode or tap their cellphone against a card reader to complete their transaction, or make a purchase online and pick it up in your store.

3. Mobile Payments

Mobile payments are another convenient payment option. Similar to online payments, mobile payments may rely on a digital wallet app. However, mobile payments also include fund transfer apps like Cash App or Venmo, purchases completed using a mobile card reader, and branded payment gateways like Amazon Pay, Android Pay, or Apple Pay.

4. Card Payment Options for Small Businesses

Finally, card payments represent one of the most popular payment options that small businesses can offer. Debit and credit card payments are fast, convenient, and guarantee a seamless purchasing experience.

In addition, many small business customers can complete large transactions using a credit or debit card. As a result, customers usually expect businesses to offer debit or credit card payment processing options.

Accepting credit card payments instantly boosts your credibility and customer service. Credit card payments provide an added layer of protection, plus an easy way to check out. Finding the best card payment processing systems isn’t easy, though.

Many credit card processing systems charge high transaction rates. For example, while the Durbin Amendment limited debit card transaction fees to 0.05% of the total purchase price, plus an additional $0.22, credit card processing fees average between 1.5% to 3.5% of the total transaction price.¹

As such, it’s vital to find a system that accepts credit card payments without charging exorbitant fees. Popular payment gateways like Due, Payment Depot, Shopify Payments, and QuickBooks Payments usually offer low or flat, monthly fees, easy payment tracing, and other services.

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How Do Successful Small Businesses Accept Payments?

Do you ever wonder how the most successful small businesses accept payments? In many cases, successful businesses choose payment methods that work for the company and its customers.

For example, while a cash-based business sounds great in theory, it could result in frustrated customers or money mismanagement. On the other hand, payment methods like personal checks pose too much of a risk for the business.

Instead, we recommend using a combination of the following three merchant services platforms to satisfy your customers and scale your small business.

Online Payment Options for Small Businesses

Small businesses can use online payments for both in-store and online transactions. When customers complete a transaction online, they enter their debit or credit card information into a secure payment gateway, which manages the payment process and automatically deposits funds into your bank account.

You can also use a digital wallet like Google Pay or Apple Pay, or another contactless payment method to make more sales and satisfy your clients in-store as well.

Text Payment

Text payments, or text-to-pay, may be a relatively new addition to the world of small business payment methods, but don’t let that alarm you. Text payments are secure, effective, and convenient for you and your customers.

With a text payment platform like Weave’s, you can easily set up your merchant account, send out automatic messages with balance information, manage recurring billing, and direct customers to a mobile payment portal by including a link in your communications. In many cases, customers can store their information and make one-click payments on the go, too.

Which Payment Methods Do Most Small Businesses Fail to Use?

We’ve discussed the payment methods used by successful small businesses. However, it’s equally important to consider the payment methods that most small businesses fail to use. In many cases, customers become frustrated by the lack of convenient payment methods. You may even miss out on sales if you don’t incorporate modern methods into your point-of-sale process.

With that in mind, some of the most common payment methods that small businesses fail to use include:

Text Payments

Text payments may be new, but that doesn’t mean they aren’t popular. In fact, more and more customers have begun to prefer text-to-pay methods over any other form of payment, including credit cards or online payments. The instant payment method allows customers to pay with just a few clicks, while you can boost your bank account balance almost instantly, especially when you use a convenient text-to-pay platform like Weave.

Credit Cards

It’s almost impossible to imagine not having the option to complete a transaction with a credit card. Even so, some small businesses avoid the payment method altogether due to the fees charged by credit card payment processing companies.

Still, refusing to accept credit cards can harm your bank account if you’re not careful. Customers routinely use credit cards to complete everyday transactions and may even avoid your store if you don’t accept their preferred form of payment.

Instead, compare different payment processing companies to find a provider that offers a low or flat monthly transaction fee. In doing so, you’ll satisfy your customers–and protect your bottom line.

What to Look for When Selecting a Payment Processing Option

Choosing a payment processing system is equally as important as deciding which payment methods you want to accept.² Whether you’re ready to upgrade your current technology or incorporate a payment processing system for the first time, keep an eye out for a merchant services and payment processing company that offers benefits such as:

• Easy merchant account setup
• Budget-friendly setup fees
• Low transaction rates or flat monthly fees
• Secure payment processing
• Fraud protection
• Easy integration for online payments, business bank accounts, and more
• Must-have features like recurring payments and billing
• Convenient technology like mobile card readers or contactless payment tools
• Reliable customer service

Most importantly, ensure that your merchant services system can handle burgeoning small business payment options like text-to-pay. For example, when you choose a platform like Weave, you can effortlessly integrate your payment terminals into your Weave dashboard, create payment requests and reminders, and use message templates to personalize messages that delight your customers.

Stop letting unscheduled treatments walk out the door because of cost and sign up to become a CareCredit provider directly through Weave today. Give your patients the flexible financing options they need to accept care, and empower your staff to seamlessly process those payments right within your existing Weave workflow.

Ready to get started? Get in touch with our team at Weave to schedule a free demo and set up your merchant account today.

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