A smooth, stress-free checkout process is vital to the success of any business, so how can you make it easier for your customers to pay? There are numerous options out there, from BACS payment methods to credit card processors. Here’s our roundup of the six best payment methods for small businesses, blending practicality with ease of use.
1. Card payments
The overwhelming majority of consumers prefer to pay using a card. In fact, according to the BRC Payments Survey in 2020, 78% of all retail transactions were paid for by debt or credit card. Small business owners could be losing out on valuable sales without accepting cards as a primary payment option. Additional benefits of card payments include a smooth, fast checkout process. Consumers can finance larger transactions on credit, allowing small businesses to reach out to a broader demographic. However, there are a few downsides including fees, chargebacks, and the potential for a customer to have this payment method declined. You’ll also need to ensure you’re using a secure payment gateway to protect client details.
2. BACS payment methods
As a streamlined payment method, BACS is hard to beat. It allows UK-based customers to make direct payments from their bank account to yours. Bank-to-bank transfers use the secure BACS network which helps ensure financial security compliance. As with credit cards or cash payment methods, BACS also enables one-off payments. A further benefit is that you’ll avoid the higher transaction fees associated with credit cards, with very low payment failure rates. However, the downside is that in the unlikely event that a BACS payment method is declined, you won’t know about it until you’ve checked your bank account. This can have a negative impact on your cash flow.
3. Mobile payments
Mobile payments have become the payment method of choice for many small businesses, particularly for service-oriented industries and smaller start-ups. To get started, you’ll simply need a mobile point-of-sale system to store client details and issue receipts. Digital wallets like Google Pay and Apple Pay allow customers to pay with a tap of their phone using near field communication (NFC) technology. Money transfer apps are also included in this category, enabling peer-to-peer payments at a distance. Another benefit is that it’s easy to reimburse payment methods like this using the same app.
4. Cryptocurrency payments
If your client base is tech-savvy, you might want to investigate accepting cryptocurrency on your website. Many online payment gateways like PayPal already take Bitcoin which makes it easy to get started. Cryptocurrencies use blockchain technology for secure transactions and can be purchased in multiple currencies, making it a good option if you have a far-flung clientele. Low transaction fees and real-time processing are additional benefits to this method.
5. Online payment gateways
To reach the widest audience, it’s a good idea for small businesses to accept multiple payment methods and fortunately online payment gateways make this easy. Use services like Shopify, Stripe, or Square to take online payments directly from your website. Be sure to compare your options carefully as there will be a vast difference in price structure and the type of payments accepted via the gateway. You should also make sure it’s easy to reimburse payment methods when customers make returns.
6. Email invoices
Finally, if you’re an independent contractor like a graphic designer or landscaper, email invoicing is often the easiest payment method to employ. You can embed payment links directly into your email after the work is complete, directing the client to a payment page to submit their bank or card details. Use an automated system to create and submit invoices, receive payments, and issue receipts to keep everything in order.
With an array of options out there, there’s a payment method for every type of small business. To find the best fit, simply compare terms, conditions, and fees carefully.
We can help
GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.