Cheat-Sheet: Accepting Payments

Why You’re Reading This

As a business owner, you want to make it as easy as possible for your customers to do business with you, and a huge part of that depends on how you accept payments. Technology has contributed to a drastic decline in payments made with cash or paper checks, meaning most consumers expect to have the option to make payments digitally. According to Fiserv’s annual Billing Household Survey, the average consumer uses 3.6 different payment methods to pay their bills each month.

For small businesses, this poses a dilemma: your customers want to pay with the method that is most convenient for them, but you need to manage your billing in a way that makes sense for your business. Establishing an online payment system can be a daunting task, but most small business owners find that doing so is essential to improving customer experience and opening the door for growth.

The key is to find a payment processing solution that works for both you and your customers.

So, where do you begin?

First you need to sort out your options. Read on, because we’ve gathered all the ways you can accept payments online for your business.

Accept Credit Cards and Debit Cards

The most popular way to accept customer payments is through credit cards and debit cards. Visa, MasterCard and American Express are among the most widely accepted credit cards.

To offer this feature to your customers, first you will need to secure a point of sale (or POS) system, such as the one provided by PaySimple.

When selecting your POS system, you will need to decide whether to have your own dedicated merchant account or use an intermediary holding account. Choosing one method over the other can mean very different business processes and funding times, so it’s important to research and determine the best option for your business.

Read this article to learn more about the pros and cons of aggregated vs. merchant accounts.

Accept eChecks Through ACH Processing

After credit and debit cards, the next most popular way to accept payments is through a direct debit of a bank account with an eCheck (electronic check) through ACH. This method allows your customer to input the information from their paper check (routing and account number, name, amount, and authorization) in an online payment form or software interface. The merchant then processes the payment electronically—without the need for a paper check.

ACH processing is governed by the National Automated Clearinghouse Association (NACHA) and has different transaction fees (often lower) than credit cards. It is also more secure and reliable than waiting for a check to come in the mail.

Read this article for more information about eChecks.

Mobile Devices

Increasingly, businesses are allowing customers to pay through mobile payment apps on devices like smart phones and tablets.

As a merchant accepting payment on a mobile device, you can key in your customers’ credit or debit card number, swipe their card or insert a chip card. The payment is confirmed and a receipt is emailed instantly. Doing business on mobile devices also allows you to access your cash flow reporting and customer records wherever you are.

By making your business mobile-friendly, your customers can also purchase services or products using their mobile devices on their own. Customers are freed from the burden of waiting in long cash register lines and can instead make a purchase wherever they have a signal.

The benefit of going mobile for merchants is undeniable. Nearly 150 million people used mobile payments for in-store purchases in 2020. (The impact of COVID-19 has no doubt increased that figure significantly.) By giving your customers this payment option, you are expanding your business’s potential to earn revenue far beyond the traditional cash register.

To find out how to make your business more mobile-friendly, click here.

A Simple Online Payment Form

You don’t need a fancy website or mobile payment app to accept payments online. By creating an online payment gateway, either on your own website, or through a page hosted by a company that specializes in online payment services, you can streamline your sales process and make it easy for your customers to pay you from wherever they are.

Customers benefit by gaining the ability to make payments with the method of their choosing—credit card, debit card or eCheck—and merchants often see repeat purchases increase because online payment forms allow customers to save their payment info. Another benefit of creating an online payment destination is that merchants can market their products or services through email, social media, or online advertising and see the results of their efforts immediately.

For help setting up an online payment form, click here.

Electronic Invoicing

Electronic invoicing or, click-to-pay invoicing, involves sending your customers an invoice by email with an online payment option, allowing them to avoid the hassle of getting out the checkbook and pay with a few clicks instead.

The benefits of this modern invoicing system are endless.

No more misplacing invoices and worrying about secure storage. By setting up this payment option, you are providing a fully integrated experience—both for your customers, and your business operators.

To get more of your customers to transfer from paper invoices to email invoicing, consider sending both for a few months so they can see the value of green e-invoicing, then try to get them to switch.

For more information on electronic invoicing, click here

Schedule Recurring Billing

This payment acceptance method is popular for businesses like gyms and child care centers, where service happens repeatedly over a long timespan. It is not only more convenient for your customers, it almost guarantees you will be paid on time and hit cash flow projections.

If you aren’t currently offering this to your customers, you may want to consider a Fiserv report that found ” … nearly a quarter of people expect instant credit for bill payments – a figure that rises to 70 percent when including those who expect same-day credit. A full 90 percent expect credit no later than the following day.”

By sending email reminders, or billing customers on a recurring basis, businesses can make their customers’ lives easier while increasing their own financial stability.

To learn more about recurring billing, click here.

What Comes Next?

Now that you’ve learned all the ways you can accept online payment, it’s time to evaluate the options to determine which methods are right for your business.

To help you out with that, we created a free payment processing evaluation guide: Download the free guide here.

The next step is to find a payment processing partner to help you start collecting payments and growing your business. At PaySimple, we’ve created a system that allows small businesses to seamlessly accept all of the payment types mentioned here, plus market services and manage customers all on one easy-to-use platform.