As a business owner, it’s important to know which payment type is right for your business. You can offer a variety of payment methods to check which one works best for you. The main purpose of different payment processing is that the purchase of your product is quick and secure for your customers.
There are different types of payment methods to choose from. Some might think cash is the best overall choice, but it has fallen out of favour recently. With the advancement in the digital world, businesses have switched to digital and online payment methods. As a result, the payment processes are more streamlined and easy.
The payment processing methods for your business depend on a variety of factors. It mainly depends on the type of transaction, how the money is sent, and accounting/POS (point of sale) system being used. In this article, we will go through all the payment types that may be right for your business.
Types of payment methods
When you are starting a new business, you should consider different types of payment processors used by other businesses. This can help you know the best one that will work for you.
Here are the most useful ones that you can choose from, generally speaking:
- Card payments
- Cheque payments
- Mobile payments
- Online payments
- Cash payments
Using a card is the most convenient way that your customers can process their payment. Card payment processing can help you do larger transactions securely. Most bigger businesses accept at least one type of card transaction.
Offering card payment can help you broaden your company. Plus, it makes it legitimate and trustworthy. Card payments are directly connected to your bank, so it makes your payment process fast. This can improve the cash flow for your business, for instance.
Cheques are a document that gives the banks authorization to transfer money to your account from other banks. For this, you need the cheque itself, date and signature of the person who is giving you the payment. This is an outdated method of payment type.
A new type of cheque payment has arrived called EChecks that has made cheques electronic, removing paper cheques. This is also a type of online payment processor for your business.
This type of payment processing is done by mobile devices such as smartphones and smartwatches. It includes a large number of payment methods like:
- Use of digital wallet apps — Payment made through mobile card readers to swipe credit cards.
- Money transfer apps — This is an electronic money payment transfer method that is facilitated by mobile devices.
In online payment processing, the payment is transferred electronically. Different types of payment gateways are used to authorize the online payment method.
The types of payment gateways include:
- Quick Book payment
However, online payment is not just for online businesses. It can be used by any business that can offer online payment methods. Online payments are a great way for your business to become technologically advanced. This mode of payment processing is quicker than other methods. It can help you gain more customers and cut expensive transaction costs, for instance. Plus, it makes the accounting process simple.
This is the biggest name in the online payment world where people can make an account and perform any transaction. PayPal has a big reputation for being safe and trustworthy. Customers and businesses can use the PayPal mobile app to improve the payment process.
Venmo and eTransfers
Venmo and eTransfers are more known for peer-to-peer transactions, but they can be used for business as well. You can simply use a QR code (read more: How QR Codes Benefit Businesses) to make the online payment. Venmo’s social commerce platform can also build your brand awareness. As well, it can help your customer make online payment more easily. Their payment is more secure and provides instant updates related to the payment. You can check your Venmo transaction on their website or mobile app, and similarly, check eTransfers through online banking.
QuickBooks payment is the most dynamic type of payment processing that has a variety of accounting processes that can save you time. They charge the customer one simple rate when they use the card reader for payment.
Consumers can make cash payments using their bills and coins. In this method, you have to manage the accounting with a manual element. Until relatively recently, cash was the only available method of payment for businesses. Now, it has been replaced as the most common payment type by digital payment processing that is steady and secure.
The benefit of having cash payments is that you get the money fast rather than waiting for the payment to get processed and delivered to your account electronically. There are no fees in accepting cash, so it’s a great way of payment for many users.
However, payment processing in 2020 and 2021 has given rise to the importance and popularity of contactless payment, which means the use of cash payments has declined rapidly. (Read more: 3 Benefits of Contactless Payment)
Ultimately, the payment processing method(s) you choose from the above list depends on your business model and your customers. The best payment method should always integrate with your accounting system and point of sale (POS). Offering a variety of payment methods can improve the cash flow for your business.
Learn more about Ackroo’s payment processing services.