In today’s world, there are many ways to pay. From in-person to online, with the tap of a card or the press of a button, payment forms are ever-changing. Offering various payment options can be a powerful business tool that allows customers to pay the way they want to pay in the method that is convenient and acceptable for them. If a business doesn’t accept certain payment types, the business may be limiting the number of customers or the number of sales. Here are the most common ways to pay and the benefits that come with increasing payment methods.
Forms of Payment
Cash and ChecksThe use of cash and checks are in decline; however, they are still valid and accepted payment methods. Small businesses most commonly accept cash. So, if you’re a small business looking to increase your payment methods, consider adding new forms of payment to increase your sales.
Money OrderMoney orders are in the same situation as cash and checks – they’re declining. People most often use money orders in situations when they may not want to reveal specific personal information. You can also use them for rent payments and giving gifts.
Debit and CreditThe most common way to pay is through a debit or credit card. “Seventy percent of people have at least one credit card and Americans are 40 percent [more] likely to use a credit card on a purchase.”
Mobile Payments or Digital WalletsMaking payments using this method is easier than ever. Mobile phones and wearable devices have become the new way to pay. Apple, Google and Fitbit® have adapted their wearable devices for contactless payment capabilities. Using digital wallet and wearables for payments can translate to shorter lines and faster checkouts.
Digital Currency - BitcoinDigital currency is currency that only exists in electronic form. An example of digital currency is Bitcoin. Although digital currency will not replace other forms of currency anytime soon, it is a payment method that younger customers are starting to use.
The ability to accept multiple forms of payment, both online and in person, is an important factor that can lead to your business’ success. As older forms of currency begin to decline in use, as has happened with checks and cash, businesses will need to adapt by adding new forms of payment. Here are five ways in which accepting multiple forms of payment can benefit your business.
Retain Current Customers
By offering multiple forms of payment, you will retain customers who are adapting to the new payment formats. With the increasing need to stay home, many customers need another way to pay. By offering online payment options, you can retain current customers who would usually shop and purchase while in-store.
Attract New Customers
Having multiple forms of payment can attract millennials who are prone to using digital wallets and cryptocurrencies, over purchasing in-store using cash. PayPal and Apple Pay are making online payments more secure, and easier than ever before. Security is a major area of concern for online shoppers. Giving them multiple ways to pay can ease security fears. Researching your target audience to determine what payment methods they use is the best way to decide what forms of payment you want to offer.
Having multiple forms of payment can increase the number of new customers you attract and the current customers you retain. It can also increase your sales. “Thirty-eight percent of small business customers have been unable to make a purchase at a physical store because their form of payment wasn't accepted.” For younger consumers who are likely to use mobile payment options, this can deter them from purchasing a product or service, if the business does not offer their preferred payment method.
Keeps Cashflow Going
Various payment methods will settle at different times, keeping the money flowing into your business. While a credit card payment may take days or weeks to settle, cryptocurrencies settle almost instantly. For small businesses, this could alleviate the stress of having to pay bills on time. Having multiple forms of payment helps keep a regular cycle in your cash flow.
Giving customers the option of how to pay can actually save you money. For example, when you accept credit cards, you will incur different types of fees for that payment method such as processing fees, fixed fees and situational fees. You may have to pay a local bank or payment gateway for those processing fees. Offering multiple payment options can save you money on fees associated with credit cards.
Discovering the ways your customer likes to pay can ultimately determine what payment methods you need to offer. The bottom line is that offering multiple payment options can be the factor that drives or deters a sale. Be sure to adapt to the changing landscape of payment options as technology continues to develop and innovate.