Managing cash flow of business effectively is the ultimate aim of any business owners , the payment methods you choose will also determine the facilities your business will need.
Before you allow customers to pay any which way, you should know the advantages and disadvantages of different types of payment .. Having various payment options giving your customers choices and also capturing every sale you possibly can.
No matter which payment form you choose, make sure that it is liked by your customers. You can try to do some surveys in order to ask customers how easy and convenient your payment cycling is for them.
If customers feel it takes too much effort to make a payment, they will be less likely to do so on time. Chances are, if it works for your customers, it will work for your business.
There are many options available in the market, so there will be one that suits your business’ needs. Here are some payment options to consider:
1. Credit and debit card payments
As long as you do your research on affordable merchant services, you should be able to accept credit and debit cards without a problem.
Credit card lets customers pay for goods and services by incurring a debt with a credit card provider. Debit cards deduct the amount of money from a sale from a customer’s bank account.
This method, often comes at a cost. Many credit card companies charge transnational fees
Visa and Mastercard dominate the market as they are widely accepted worldwide compare to Verve card, American Express and Discover ,, This are the next big players in the market,
2. PayPal payment method
PayPal is simpler, safer way to pay online, it allows customers to send, receive, and hold funds in 25 currencies worldwide. PayPal’s services allow people to make financial transactions online by granting the ability to transfer funds electronically between individuals and businesses.
3. Cash payment method
Cash payments are useful for low-value items or if other payment methods are unreliable. You will need a method of tracking your sales such as a cash register. You will also need to regularly bank your cash and avoid storing large amounts of cash to reduce the risk of theft.
The beauty of cash is that it costs nothing to process; you merely collect cash payments and deposit them in your business bank account.
Some businesses choose to operate on a “cash only” basis so that they can (illegally) report less on tax documents.
paying by check is becoming less frequent due to the ease of electronic methods above. Checks require higher levels of handling to process them and can attract fees. They also take about three business days to clear.
checks are relatively easy to fake, and few businesses can recognize the signs of fraud before they are affected. checks is all sorts of sensitive information, including account numbers and addresses, meaning a misplaced check could expose a consumer to identity theft.
Bitcoin is an innovative digital payment method, which has now taken a turn into the conversion to different currency forms like the conversion from Bitcoin to Paypal, performed over a peer-to-peer network. It partnered with Luno (previously known as BitX) to allow sellers to accept Bitcoin payments. … Buyers simply pay the Bitcoin amount (at the current rate of exchange) during checkout.
The challenge is that most consumers view Bitcoin as a volatile investment rather than a practical payment method, so it is unlikely that you need to find a way to accept cryptocurrency any time soon.
6 , Gift cards and vouchers:
Gift cards and vouchers can increase sales around special occasions such as Christmas and birthdays. They can also help promote your brand while helping to bring in new customers. In some places, gift cards or gift vouchers are valid for longer periods and businesses will need to honour the purchase if it is within that period.
7, Money Orders
Like checks, money orders are paper documents used to make payments. Unlike checks, money orders are thoroughly secure, issued only after a customer has proffered the money represented on the order.
A money order tells a bank to pay you money. Unlike check, money orders are prepaid. Money orders can’t bounce due to insufficient funds since they are prepaid, but they can bounce due to others problem, such as suspected fraud.
8. Automated clearing house (ACH)
Automated clearing house (ACH) payments connect bank accounts with billing accounts, so payments are made automatically. Most often, this payment method is used for recurring payments for services; for example, employers’ “direct deposit” is an ACH payment made to employees.
Freelancers should request ACH payment from their clients because it is faster, more secure, and less costly than other forms of payment.