Starting up in 2018 How to start a business
2018 is the year that you are going to start a business. You are finally going to turn your idea int
As a small business owner, you must offer your customers different payment methods. That way, the customer can purchase in a way that suits them. So, what are the payment options available, and the advantages and disadvantages of each?
Despite the popularity of cash payments declining, a large majority of customers will still expect you to offer this type of payment. This is particularly true for customers who make low-value purchases, such as groceries from their local corner shop or a coffee from a cafe. Aside from the expectation to accept cash payments, what other benefits are there as a business owner?
To accept payment of cash, you will need to set up a till with a coin float. An electronic system is needed to keep a record of all transactions and issue customer receipts. To deposit the cash, you will also need a business bank account.
For both large and small businesses, the ability to process card transactions is becoming a necessity. Investing in a card payment system enables customers to pay with both credit and debit cards and prepaid cards (other card types could include gift cards, corporate cards or store cards). Here is an explanation of each type of card:
Debit Card: When used, a debit card transfers money directly from the customer’s bank account. Visa, Mastercard and Maestro are the three main types of a debit card, and they can all be operated via chip & PIN, contactless, over the phone or online.
Credit Card: When used, a credit card enables customers to purchase goods on credit from their issuer, which they will pay back with interest. Visa, Mastercard and Maestro are the three main types of credit card, and they can all be operated via chip & PIN, contactless, over the phone or online.
Prepaid Card: A prepaid card topped up with credit. Once loaded with monetary value, they operate in the same way as a debit card and operate via chip & PIN, contactless, over the phone or online.
For customers, card payments are the most popular way to pay. But what are the advantages and disadvantages to a small business owner?
To accept card payments there are a few things to consider. You’ll need to set up a merchant account and install the right equipment (a card terminal or integrated till.) This is rented monthly.
Paying by cheque is a less common payment type due to the rising popularity of card payments. While it is rare for customers to request writing a cheque as an alternative payment method, it can still occur. As a small business owner, here is what you should consider when weighing up the benefits of accepting this payment type:
If you want to accept cheques as a form of payment, make sure you know how to spot fraudulent ones. You will also need a business bank account, to deposit the payable funds.
Due to our increasing use of smartphones, customers expect to make mobile payments using e-wallets. Apple Pay, Samsung Pay, and Android Pay are examples of mobile e-wallets, which can be installed on a hand-held or wearable device. An e-wallet stores card information, enabling the consumer to use their device as a contactless debit card.
To accept Apple or Android Pay, businesses need an NFC-enabled credit card reader. NFC stands for Near Field Communication and enables short-range wireless technology and the exchange of data between devices. It is this kind of technology that we refer to as ‘contactless payments.’
Electronic bank transfers, or, wire transfers, are payments made through an online bank account. Customers can make online payments directly from their bank account, credit or debit card, including all-in-one payments like PayPal or Worldpay Online Payments. Electronic payments enable your customers to pay quickly and easily online and also set up recurring payments. If you want your customers to be able to make online purchases, accepting electronic payments is essential.
To accept electronic payments, you will need to set up a merchant account. A merchant account will enable you to process debit or credit card purchases from customers through a payment gateway. It is the same technology required for card payment terminals.
As a small business owner, there are many different types of payment methods to consider. It is important to evaluate which ones your customers (and yourself) are most likely to benefit from. For a vast majority of businesses, accepting cash and card payments is essential.
Payzone can help you choose the right card payment solution for your business through a third party supplier. Get in contact and call 0800 0566 015.