- Get the steer on how to choose your payment methods.
- Don't just do what everyone is doing.
- Know all the important aspects to make the best decision.
The best mix of payment options for your business will make the point of sale transaction go fast and painless, have the lowest impact on your gross profits, and also extend your cash flow as much as possible. And much more.
There's well over 20 ways to accept payments from customers and clients – cash, cards, buy now pay later, bank transfers and digital wallets. Some of these payment methods are much more expensive than others. Some of them can really help take your business to the next level or really hold your growth back.
This post will help you to answer the question of how do decide on what methods of payment you're going to accept and how to make it work best for your business and your customers. It'll help you to know which POS machine or online payment gateway to use.
1. Give people choice
People want choice because their personal finances are fractured with pockets of money in all sorts of places. Does your POS machine or payment gateway allow you to offer a choice of payment options to your customers? If you're not getting the sales you want then speak to your customers about what payment options they'd like to use. Maybe you'll need to increase the choices you give them at the check out or online shopping cart.
2. Have a backup
Always have a backup method of accepting payments should your preferred methods go down.
3. The cost to accept payment
The cost to accept payment can really eat into your profit margins so watch out for the percentage fee on the transaction value and other fixed fees per transaction. Factor in the upfront costs for buying the point of sale machines, equipment and accessories. Check our comparison chart of over 20 payment methods for more insight on what costs to expect.
If your business has larger volumes of sales going through your POS gateway then you should use that to negotiate more favorable terms or transaction fees from your payments providers. Speak to their sales team and see what they can do.
Research (and common sense) tells us that customers dislike being surcharged, even if they don't tell you. If you impose a surcharge it cannot be more than the cost of acceptance. For example, you can't charge a 4% surcharge if it only cost 2%. You are legally not allowed to make margin by surcharging.
Think about how your payment merchant integrates with your in-store POS system and digital presence. Ideally, it'll work seamlessly with minimal fuss, and feed data back up into your accounting and marketing platforms.
7. Settlement times
Watch out for slow settlement times. If your day's takings take too long to clear and end up in your bank account then you'll experience knock on effects to your cash flow.
How do your payment systems will deal with pesky fraudulent charges and chargebacks from customers who default or dispute charges?
9. Tracking & Reporting
For online stores, posting products out to customers, make sure you keep the tracking information and a delivery receipt. For large orders, require a signature confirmation at delivery.
Don't just set and forget. At least once every 12 months you should review your payment choices to see if you can do things cheaper, faster or better elsewhere. If you're not happy let your payment providers know about it.
If you're a running a cafe, a retail shop or eCommerce site leave your comment below. What did we miss? What's your experience been like?