Small Businesses: Payment System Options to Consider

Getting paid on time, every time, is vital for small businesses. It helps to protect margins on sales while also helping you to maintain a solid cash position. In fact, having good cash flow is critical to managing your business’s day-to-day finances. So, what are some of the most common methods that small businesses can use in order to receive payment?

Credit Card Payments With a Merchant Account

If you run a retail outlet, or have an e-commerce website, then accepting credit cards is an absolute must. These point-of-sale (POS) systems ensure that you get paid immediately. However, the transaction fees can sometimes be exorbitant. As such, it’s critical that you comparison shop on merchant accounts.

Merchant accounts are provided through a bank. They simplify how credit cards are accepted and processed. The higher your monthly transactions, the lower your monthly fees and transaction fees. Just be ready to negotiate those fees when choosing your provider.

Online Payment

It costs nothing to set up a PayPal, Alertpay or Moneybooker account. These are simple add-ons to websites that simplify how customers pay for online purchases. Paypal can actually accept credit cards online. It’s a good option for those small businesses that don’t want to go through the process of setting up a merchant account. However, PayPal’s currency conversion and transaction fees are drawbacks as they are relatively high and can quickly add up.

Email Transfers, Certified Checks and Money Orders

Email transfers are a simple approach to getting paid. This is available through online banking where your customer simply needs to enter the name of you or your company and the amount that needs to be transferred. Once the email is received, you enter you own password into your bank account and the funds are deposited.

If you’re worried about the creditworthiness of a given customer, then have them pay you by certified check or money order. Certified checks are backed by a bank because the money has already been set aside. Do not accept personal checks unless you know the customer and they have a history with your business.

Smartphone and Mobile Payment Processing

There are several aps available for small businesses that allow them to accept credit cards through smartphones and mobile devices. This is an excellent solution for small service businesses that are always on the move, always on the road and need to be paid immediately once the job is complete. Of course, the same credit card processing fees apply.

Finally, if you’re dealing with overseas clients, then having them pay you by wire transfer is your best bet. However, most small businesses are best serviced by one or all of these aforementioned payment methods.