Guide to the Manual Payment Process

Automated payment processing has become the norm for many Australian businesses, offering the benefits of security and convenience. Yet there are still situations where manual payment methods can be useful. Whether due to customer preference or industry standard, many business owners will need to familiarise themselves with the manual payment process. Here’s what you need to know.

What is a manual payment?

A manual payment can take many forms, from cash to cards. Any type of payment method where the business must complete the process manually qualifies under this definition. For example, if you need to physically write an invoice and reconcile the payment in your accounting books, this describes manual payment processing. Similarly, accepting cash from a customer and giving them change in return is also an example of a manual payment.

By contrast, automated payments include any methods that don’t require your input. Fully automated payment gateways, payment processing software, direct debits, and EFTPOS payments are all automated rather than manual.

What are the types of manual payment methods?

There are many different types of manual payments, some more common than others. Here are a few of the primary manual payment methods you’re likely to come across in Australia.

• Cash: While Australian consumers are moving away from cash, it’s still preferred by older and more traditional demographics.

• Cheques: They’re almost entirely phased out in the retail space, but cheques are still used to pay for large business transactions and to settle invoices.

• MOTO payments: Mail order/Telephone order payments, or MOTO, offer a way to take credit card details when the buyer’s not there in person. However, accepting card payments this way means that you’ll need to manually input the credit card number, expiration date, and verification code into your system.

• Virtual terminals: Some businesses use virtual terminal tools and apps that allow their business computer to function as a POS system. As with MOTO payments, you’ll need to wait as your customer enters their details into the online form you send them to manually verify the transaction.

• Bank transfers: While direct debits are automated, some bank transfers do involve manual reconciliation after the payment has been received. This means you’ll need to enter the transaction details into your accounting system and ensure all accounts match for accuracy.

How to process credit card payments manually

While cash and cheques qualify as manual payments, most online customers prefer to pay with their card. In this case, you’ll need to figure out how to process credit card payments manually. Your options include virtual terminals and MOTO payments as described above. The specific steps of this manual payment process will depend on the payment gateway or processor you choose.

Typically, you’ll need to go into your virtual terminal or POS screen and select ‘manual credit card entry’ from the checkout options. You can then ask for the customer’s credit card details, inputting them into the system to process the payment. These details should include:

• Card number

• Expiration date

• CVV

Make sure that you’ve accurately listed all items or services sold before charging your customer. Once the transaction’s been approved, you can email your customer a digital receipt either through SMS message or email.

What are the advantages of the manual payment process?

There are several reasons to consider using manual payment processing.

• It caters to customer preferences. For example, some customers prefer to speak to a sales representative over the phone before providing card details, while others prefer to pay in cash.

• It is necessary for some business types. If you sell wares in person at special events and markets, you’ll need a manual card reader or take cash to sell your goods. Similarly, B2B businesses often issue invoices requiring manual payment processing over the phone.

• It puts the business in control. You control the timing of payments by taking them yourself, overseeing the entire process from start to finish.

Alternatives to manual payment processing

While there are some benefits to the manual payment process, it’s far more convenient to automate payment collection. Manual payment processing is more labour intensive, requiring physical admin that takes up a good chunk of your time.

GoCardless offers a convenient, cost-effective alternative to manual payment methods. Using BECS direct debit, you can pull authorised payments directly from customer bank accounts. These are set up to be pulled automatically, without any need for further manual processing or awkward conversations regarding late payments. Our new PayTo solution will also enable instant bank payments for one-off transactions, further automating the payment collection process. It’s quick and easy to get started, all at lower cost than manual payment processing.

We can help

GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.