As a small business owner, you have your hands full.
You’re responsible for your company’s day-to-day operations, ensuring everything runs smoothly and efficiently.
With so many things to worry about already, one of the last things you need is to be bogged down by payment processing problems.
Fortunately, various payment methods are available for small businesses, allowing you to quickly and securely process customer payments.
In this guide, we’ll explore the different payment methods available to small businesses and how to decide which is best for you. We’ll also go over what to consider when choosing a payment processor.
Table of Contents
- Key Takeaways
- Types of Small Business Payment Methods
- Are Certain Payment Methods Better Than Others, and Why?
- How Do You Know Which Payment Methods Are Best for Your Small Business?
- What to Consider When Choosing a Small Business Payment Processor
- Why GETTRX Is the Best for Small Business Payment Method Processing
- The Bottom Line — Best Online Payment Methods for Small Businesses
Key Takeaways
- Small businesses have various payment methods, including cash, direct debit, credit card, check, online payments, mobile payments, digital wallets, subscription payments, ACH transfers, wire transfers, e-checks, and email invoicing.
- The best payment method depends on the type of business, target customer base, average transaction size, and specific business needs.
- Brick-and-mortar businesses should focus on a mix of traditional and modern payment methods, while e-commerce businesses should prioritize secure online payment options.
- Service-based businesses should choose payment methods that facilitate easy invoicing and tracking. In contrast, subscription-based businesses should opt for methods that support recurring payments.
- International businesses should focus on payment methods that support multiple currencies and offer competitive exchange rates.
- When choosing a payment processor, consider factors such as price, features, flexibility, functionality, security, customer service, and experience & reliability.
- Offering a range of secure, convenient, and cost-effective payment options will enhance customers’ experience and contribute to the growth and success of a small business.
- Ensure that your chosen payment methods integrate seamlessly with your existing business management tools, such as shopping cart platforms or accounting software, for a smooth and efficient payment process.
- Prioritize payment processors that comply with industry security standards, such as PCI DSS, and offer robust fraud protection measures to protect your customers’ sensitive data and minimize the risk of fraud.
- Responsive and knowledgeable customer service is essential when dealing with technical issues or disputes. Choose a payment processor with a strong reputation for excellent customer support.
- Evaluate the payment processor’s track record, years of experience, and the number of satisfied customers to gauge their reliability and trustworthiness.
Types of Small Business Payment Methods
Here’re the most popular payment methods:
Cash as a Payment Method
Cash has been the traditional method of payment for centuries. It is still widely used today, especially for small businesses that operate in physical locations.
Cash transactions are simple and straightforward, as customers pay with physical currency, and the business owner receives the payment immediately. This method is ideal for businesses with small transactions and a local customer base.
Pros:
- Universally accepted
- No processing fees
- Immediate payment
- Easy for customers to understand and use
Cons:
- Risk of theft or loss
- Difficulty in tracking transactions and managing cash flow
- Not suitable for online businesses
- Inconvenient for large transactions
Direct Debit as a Payment Method
Direct debit is an electronic payment method that allows customers to authorize businesses to withdraw funds directly from their bank accounts. This method is commonly used for recurring payments, such as subscriptions or memberships. Direct debit can help businesses ensure a steady cash flow and reduce the risk of late or missed payments.
Pros:
- Automated and convenient for both customers and businesses
- Reduces the risk of late or missed payments
- Suitable for recurring payments
- Lower processing fees compared to credit cards
Cons:
- Requires customer trust and authorization
- Not suitable for one-time or irregular payments
- Setup and management can be complex
- Potential for chargebacks and disputes
Credit Card as a Payment Method
Credit card payments are a popular method for both in-person and online transactions. They offer convenience and security for customers while also providing businesses with a reliable and efficient way to process payments. Credit card transactions are processed through a payment gateway, which verifies the card details and transfers the funds from the customer’s account to the business’s account.
Pros:
- Widely accepted and convenient for customers
- Suitable for both in-person and online transactions
- Can increase sales by offering customers more payment options
- Provides some level of fraud protection
Cons:
- Processing fees can be high
- Risk of chargebacks and disputes
- Requires a payment gateway and merchant account
- Compliance with the Payment Card Industry Data Security Standard (PCI DSS) is mandatory
Check as a Payment Method
Checks are a traditional form of payment that involves customers writing a paper document to authorize the transfer of funds from their bank account to the business’s account.
While checks have become less popular recently, some businesses still accept them, particularly for larger transactions or from long-standing customers.
Pros:
- It can be used for large transactions
- No processing fees
- Provides a paper trail for record-keeping
Cons:
- Risk of bounced checks and fraud
- Slow processing time
- Inconvenient for customers and businesses
- Not suitable for online transactions
Online Payments as a Payment Method
Online payment methods encompass various electronic payment options specifically designed for e-commerce and online businesses.
These methods include payment gateways, digital wallets, and online banking transfers. Online payments offer convenience and flexibility for customers while providing businesses with a secure and efficient way to process transactions.
Pros:
- Convenient and flexible for customers
- Secure and efficient processing
- Suitable for e-commerce and online businesses
- Can integrate with various shopping cart platforms
Cons:
- Processing fees can be high
- Requires a payment gateway and merchant account
- Compliance with security standards is mandatory
- Risk of online fraud and chargebacks
Mobile Payments as a Payment Method
Mobile payments are transactions made using a mobile device like a smartphone or tablet. This method is becoming increasingly popular as it offers customers a convenient and secure way to pay for goods and services. Mobile payments can be processed through apps, digital wallets, or mobile point-of-sale (mPOS) systems.
Pros:
- Convenient and secure for customers
- Can increase sales by offering a modern payment option
- Suitable for both in-person and online transactions
- Can integrate with various business management tools
Cons:
- Requires investment in mobile payment technology
- Processing fees can be high
- Risk of mobile device theft or loss
- Compliance with security standards is mandatory
Digital Wallets as a Payment Method
Digital wallets are electronic accounts that store a customer’s payment information, allowing them to make transactions quickly and securely. They can be used for in-person and online transactions, offering customers a convenient and secure payment method. Popular digital wallets include PayPal, Apple Pay, and Google Wallet.
Pros:
- Convenient and secure for customers
- Can increase sales by offering a popular payment option
- Suitable for both in-person and online transactions
- Can integrate with various shopping cart platforms
Cons:
- Processing fees can be high
- Requires a payment gateway and merchant account
- Compliance with security standards is mandatory
- Risk of online fraud and chargebacks
Subscription Payments as a Payment Method
Subscription payments are recurring transactions automatically processed at regular intervals, such as monthly or annually. This method is ideal for businesses that offer subscription-based products or services, such as software, memberships, or content. Subscription payments can be processed through direct debit, credit card, or digital wallet transactions.
Pros:
- Automated and convenient for both customers and businesses
- Ensures a steady cash flow
- Suitable for subscription-based products or services
- Can integrate with various business management tools
Cons:
- Requires customer trust and authorization
- Risk of chargebacks and disputes
- Compliance with security standards is mandatory
- Processing fees can be high
ACH Transfers as a Payment Method
Automated Clearing House (ACH) transfers are electronic transactions that move funds between banks. ACH transfers are commonly used for direct deposit, bill payments, and business-to-business transactions. This method is ideal for businesses that process large transactions or transfer funds between different bank accounts.
Pros:
- Low processing fees
- Secure and efficient processing
- Suitable for large volumes of transactions
- Can integrate with various business management tools
Cons:
- Slow processing time compared to other electronic methods
- Requires a payment gateway and merchant account
- Compliance with security standards is mandatory
- Risk of online fraud and chargebacks
Wire Transfers as a Payment Method
Wire transfers are electronic transactions that move funds between banks in real time. This method is commonly used for large transactions, international payments, or urgent transfers. Wire transfers offer a secure and reliable way to transfer funds. Still, they can be expensive and time-consuming for businesses.
Pros:
- Secure and reliable processing
- Suitable for large transactions and international payments
- Real-time fund transfers
Cons:
- High processing fees
- Slow processing time compared to other electronic methods
- Requires a payment gateway and merchant account
- Compliance with security standards is mandatory
E-checks as a Payment Method
E-checks, or electronic checks, are digital versions of traditional paper checks. They allow customers to authorize the transfer of funds from their bank account to the business’s account through an electronic transaction. E-checks offer a secure and efficient way to process check payments without physical documents.
Pros:
- Secure and efficient processing
- No need for physical documents
- Can integrate with various business management tools
Cons:
- Requires a payment gateway and merchant account
- Compliance with security standards is mandatory
- Risk of online fraud and chargebacks
- Not as widely accepted as other electronic methods
Email Invoicing as a Payment Method
Email invoicing offers businesses a convenient and flexible way to manage billing and payments. It allows businesses to send invoices to customers electronically, typically through email. Customers can then pay the invoice using their preferred payment methods, such as credit card, digital wallet, or bank transfer.
Pros:
- Convenient and flexible for both customers and businesses
- Can integrate with various business management tools
- Suitable for businesses that offer custom products or services
Cons:
- Requires a payment gateway and merchant account
- Compliance with security standards is mandatory
- Risk of online fraud and chargebacks
- Processing fees can be high
Are Certain Payment Methods Better Than Others, and Why?
The best payment method as a solution for small businesses depends on various factors, such as the type of products or services offered, the target customer base, and the business’s specific needs. Some payment methods may be more suitable for certain businesses due to their convenience, security, or cost-effectiveness.
For example, cash transactions may be ideal for small brick-and-mortar businesses with a local customer base, while online payments are essential for e-commerce businesses.
Subscription payments are perfect for businesses that offer subscription-based products or services, while wire transfers may be necessary for businesses that deal with large transactions or international payments.
How Do You Know Which Payment Methods Are Best for Your Small Business?
To determine the best payment methods for your small business, consider the following factors:
- Type of business: The nature of your business plays a significant role in determining the most suitable payment methods. For instance, brick-and-mortar stores may prioritize cash and card payments, while e-commerce businesses need to focus on online payment options.
- Target customer base: Consider the preferences and expectations of your target customers. For example, younger, tech-savvy customers may prefer digital wallets and mobile payments. In contrast, older customers might be more comfortable with traditional payment methods like cash and checks.
- Average transaction size: The size of your typical transactions can influence the payment methods you choose. For instance, businesses with smaller transaction sizes may benefit from offering quick and convenient payment options like mobile payments, while those with larger transactions might prioritize more secure methods like wire transfers.
- Specific business needs: Evaluate your business’ unique requirements, such as cash flow management, fraud protection, and international payment capabilities. Choose payment methods that address these needs and help streamline your operations.
To help you make an informed decision, use the table below to compare the best payment methods for different small business types:
| Business Type | Consideration | Best Payment Methods |
| Brick-and-mortar | Focus on offering a mix of traditional and modern payment methods to cater to a diverse customer base. Ensure that your payment methods are quick and convenient to smooth the checkout process. | Cash, credit cards, mobile payments, digital wallets |
| E-commerce | Prioritize secure online payment options that integrate seamlessly with your website and shopping cart platform. Offer multiple payment options to cater to customer preferences and increase conversion rates. | Online payments, credit cards, digital wallets, subscription payments |
| Service-based | Choose payment methods that facilitate easy invoicing and payment tracking. Consider offering electronic payment options like ACH transfers and digital wallets to streamline your and your client’s payment process. | Email invoicing, ACH transfers, credit cards, digital wallets |
| Subscription-based | Opt for payment methods that support recurring payments and automate the billing process. Ensure your chosen methods are secure and reliable to maintain customer trust and minimize payment disputes. | Subscription payments, direct debit, credit card, digital wallets |
| International | Focus on payment methods that support multiple currencies and offer competitive exchange rates. Prioritize secure and reliable options like wire transfers for large transactions and international payments. | Wire transfers, credit cards, digital wallets, online payments |
What to Consider When Choosing a Small Business Payment Processor
When selecting a payment processor for your small business, it’s essential to consider various factors that can impact your business’s efficiency, security, and overall success. Here’s a detailed breakdown of the key factors to consider:
- Price: Assess the overall cost of using a payment processor, including processing fees, monthly fees, and additional charges. Ensure the pricing structure aligns with your business’s budget and transaction volume.
- Features: Identify the specific features your business requires, such as recurring payments, invoicing, or international transactions. Choose a payment processor that offers these features to streamline payment processing and enhance customer experience.
- Flexibility: Opt for a payment processor that supports multiple payment methods and can adapt to your business’s changing needs. This flexibility allows you to cater to a diverse customer base and accommodate future growth.
- Functionality: Verify that the payment processor integrates seamlessly with your existing business management tools, such as your shopping cart platform or accounting software. This integration ensures you and your customers a smooth and efficient payment process.
- Security: Prioritize payment processors that comply with industry security standards, such as PCI DSS, and offer robust fraud protection measures. This security helps protect your customers’ sensitive data and minimizes the risk of fraud.
- Customer Service: Choose a payment processor with a strong reputation for excellent customer support. Responsive and knowledgeable customer service can be invaluable when dealing with technical issues or disputes.
- Experience & Reliability: Evaluate the payment processor’s track record, years of experience, and the number of satisfied customers to gauge their reliability and trustworthiness. A proven history of success can provide peace of mind and confidence in your chosen processor.
Why GETTRX Is the Best for Small Business Payment Method Processing
GETTRX is a payment processing solution that offers a range of benefits for small businesses, including:
- Flat $29 pricing without extra fees, making it cost-effective for businesses of all sizes
- Flexible payment options supporting multiple payment methods to cater to various customer preferences
- Robust security measures ensuring the safety of your customers’ sensitive data
- Over 30 years of experience in the payment processing industry, with a proven track record of success
- $1.5 billion in processed payments and 35,000 happy customers, demonstrating reliability and trustworthiness
But these are all just numbers. See for yourself how we’re helping small businesses save over $179,652.00 yearly on charges.
The Bottom Line — Best Online Payment Methods for Small Businesses
In conclusion, the best payment methods for small businesses depend on various factors, such as the type of business, target customer base, and specific business needs.
By carefully considering these factors and evaluating different payment processors, you can choose the most suitable payment methods for your small business.
Ultimately, offering a range of secure, convenient, and cost-effective payment options will enhance your customers’ experience and contribute to your business’s growth and success.
