We’ve all been in a situation before where we wanted to make a purchase and when we are ready to pay, the business does not accept our preferred payment method.
It’s a nightmare situation all the way around because no one gets what they want. Alleviating this problem is easier than you might think. It’s important that businesses accept a wide variety of payment types that go beyond just the traditional payment methods of cash or check.
Many e-commerce companies have been able to grow quickly by offering the convenience of making a purchase through online platforms. A perfect example of this was eBay using PayPal as a primary method of payment long before their competitors.
Just because you’re not a giant online business doesn’t mean that you can’t benefit from expanding the ways in which you can be paid for your products or services. In fact, it’s crucial that you are aware of the many different payment methods that customers are likely to use when making a purchase.
By doing so, you accommodate your customers and increase your likelihood of making more sales. Let’s look at some of the more popular methods of payment your business should be accepting.
What types of payment should I accept?
Not everyone carries cash these days, but it’s still one of the most popular forms of payment for many businesses. As such, it should be clear that cash should be an accepted payment option at your business. Cash, typically, is a safe and secure way to make a purchase.
However, if your business operates solely online, cash isn’t going to be an option for your customers. Aside from these instances where it’s not an option, you’re typically doing yourself a disservice by not accepting cash.
Even though checks might seem a bit archaic, there will still be customers that choose checks as their preferred payment method.
Another nice thing about checks is that unlike some other more modern forms of payments, accepting checks can get you around processing fees.
As checks are still popular, and with the minimal to non-existent processing fees, as a business owner you would be wise to still accept checks.
The one caveat here is that you’ll want to make sure that you take the time to establish proper rules and check acceptance policies. It’s important to cover yourself from having to deal with too many bounced checks.
3- Debit/Credit Cards
Debit cards and credit cards have become the most popular form of payment for most business to consumer transactions, and many business to business transactions.
This payment option offers convenience to customers as they can simply swipe their card, enter the appropriate information, or setup recurring payments online to make a purchase.
However, as mentioned previously there can be processing fees for your business to pay that are associated with credit cards that can cut into your bottom line, so it’s important to take that into account when setting your pricing if you see an increasing percentage of your sales moving to debit and credit cards.
4- PayPal and Online Wallets
These payment options have gained popularity in the last few years as they allow customers link their bank account and/or credit card to these accounts to make purchases.
Today, consumers rely heavily on such online wallets including PayPal or its mobile payment service Venmo. As a business owner, accepting these payment options allow for convenient transactions.
How your business will benefit
Change can be difficult. If your business has been successful it can be easy to stay in your comfort zone when it comes to payment options.
The truth is, however, more and more customers expect flexibility in payment options, and your business can really stand to benefit by accommodating them. Let’s look at some of the advantages of stepping outside of your comfort zone.
1. Increased revenue
The potential to increase your revenue should be a major motivator to accepting more payment types. The more customers that can make a purchase with their preferred payment method will lead to more short term and long term sales for your business, particularly if your main competitors are less flexible than you are.
2. Customer convenience
With shopping literally at your fingertips 24 hours a day, customers are at a point where they expect convenience.
Even though it could be easier for your business to accept just cash and check, it is likely that some consumers would rather pay with a credit or debit card and accrue their rewards points, or they may simply not have a cash or a check handy at the time they want to make a purchase.
Presenting a wide variety of different payment options will be convenient to the customer who is wanting to make a purchase.
3. Attracting new customers
Most people have a preferred payment method that they tend to stick with when making a purchase, whether shopping online or at a physical location. Therefore, it can become crucial for your business to accept a wide variety of payment options to attract new customers.
If you run a service business and your quote dictates a limited variety of payment terms that aren’t to a customer’s liking, they’ll likely seek out a competitor that will accommodate them. This, of course, works the other way as well.
If someone’s making a big purchase and wants to get credit card points but your competitor doesn’t accept that as a payment option, that opens up opportunities for you. Being more flexible gives you the opportunity to reel in those customers who otherwise might not have even considered doing business with you.
4. Encourage repeat business
It’s crucial as a business owner to reduce any kind of barriers that customers are facing when making a purchase. Make it simple for your customers to make a purchase and give them confidence future transactions will go smoothly as well. Being easier to pay than the competition can help you establish brand loyalty and give those loyal customers reason to refer your business to their family and friends.
As a business owner, it’s important to stay up to date and aware of the developments in payment technology and especially the preferred payment methods of your clientele. Make it a habit to talk to current and prospective customers about how they prefer to pay so you can stay ahead of your competitors, attract new business, and gain more repeat customers.
About the Author: Kim Phillipi is currently the President and owner of Building Science Academy, LLC, a startup company that was formed in 2009 operating a construction business, GreenFit Homes, and an app development company for the construction business, JobFLEX.