Guide to online payment methods for small businesses

In the digital age, small businesses have a better opportunity than ever before to scale up their online stores and reach global customers.

Part of making that a successful growth process involves choosing the right payment methods to match your customer base.

If you want to find out how to do that, and pick a cost-effective transaction process along the way, then read this guide for all the right insights.

How can small businesses accept online payments?

As technology keeps advancing, more and more ways for businesses across the world to complete transactions.

There are more traditional methods (such as checks and cards), but increasingly popular are alternative payment methods. These include digital wallets and payment gateways.

We have a full guide to online payment methods you can check out. But we’ll also provide a summary of these below for you.

So, how do small businesses accept payments? There are a number of popular methods, which we’ll explore below.

Cash

Yes, physical money is still a popular option for many consumers. Especially older generations who are more used to this traditional payment method.

If you have a real store to complement your digital one, of course you can accept cash for your goods.

This can actually be eCash with an online store, or you can accept physical cash in the form of coins or notes.

Check

Although checks may seem to be falling out of favour with consumers (and they certainly are), some of your customers may still appreciate having this option available.

Again, this is largely down to older generations who are more used to paying with this option.

And while this method is likely to disappear entirely in future, that inevitability is still quite some time off. In a decade, some consumers may still want to use this method. So, it’s important your business caters to their needs.

The result is you may find it worthwhile to accept physical or eChecks.

You may prefer to use more modern techniques (such as a digital wallet), but offering flexibility (and familiarity) with checks can help build trusting and loyal customers.

Cards (credit or debit)

Cards remain the most popular form of payment in the world. Whether offline or online, it’s the go-to approach for billions of consumers around the world.

This means it’s essential to offer this payment method to your customers to capitalize on the expectations of global consumers.

And there are several ways in which you can accept card payments. It can be in-store using a card machine—again, a traditional payment method tens of millions are familiar with (whether part of new or older generations).

But online options are even more effective, including using a payment processor to manage your online transactions with fast speeds and total security.

Online

There are various effective payment methods available, such as using a processor/gateway to process your customer transactions.

Mobile

With more and more consumers taking to their smartphones to buy goods and services, it’s another crucial step for your business to take.

You need to be accepting these types of payments to tap into this emerging trend, which is already becoming the established norm.

This means you need to look to offer in-app payments and mobile-based transactions.

It’s also good business practice to have a mobile-friendly website, so consumers can easily navigate your website to look for (and buy) your goods and services.

What’s the best payment method for small businesses?

In 2021, there are many and varied ways of paying for goods online. Online payment methods for small businesses include your business accepting:

• Credit cards and debit cards.
• eChecks with ACH processing (US only).
• Mobile payments.
• Digital wallets.
• An online payment gateway.
• Click-to-pay email invoicing.
• Recurring payments/billing.
• EMV and chip cards.
• Online stores.
• In-app payments.

With so many methods of online payment for small businesses available, you may wonder what the best approach to take is. Well, we can steer you in the right direction.

The best payment methods for small businesses really depends on the type of customers you want to reach. Along with the budget you have and the scale of your audience—are you reaching local consumers or global ones?

With the wide range of options available, many business owners are on the lookout for the “best” payment method available on the market.

Arguably, this isn’t the right approach to take. It’s more important to find the right option for your business, as the definition of the “best” payment method will differ from one business to the next.

For example, if you’re a SaaS business offering a software solution, expecting customers to pay by physical cash or checks would be pretty disastrous for your efforts. Whereas for a store selling goods, this would obviously be an ideal approach.

So, how do you make a decision. Take some time out to investigate and:

• Carefully consider the payment methods that work for your small business.
• Weigh up which ones work best, or if you’re eager to offer a wide variety of them.
• Make your decision and look to integrate them into your business.

The reality is after you explore your small business payment options, you’ll likely immediately see the right choice for your small business.

With the wealth of options available, you’re almost certain to find something that works wonders for you.

However, it may not always be clear. If this is the case the approach you can take is to consider the advantages and disadvantages of each method you have under consideration.

If you’re still stumped at that point, have a look at what your competitors do. If their approach is working, consider replicating the methods they have.

And you should also weigh up the complete range of methods your customers will be looking for.

You may need a combination to meet customer expectations. For example, using credit/debit card options alongside digital wallet and mobile payments.

But many small businesses will use a processing company to manage their payment requirements, so let’s take a closer look at how this works for you.

What's a payment processing company?

A payment processor is essentially a mediator for merchants and consumers. It processes the latter’s funds, validates the money, and then forwards it to your bank account.

It allows for flexible control and online payment systems for small businesses such as yours. The way it works is like this:

When a customer is about to pay for something, the payment processor encrypts payment details and sends them to your web server.

• This data is forwarded to a payment gateway.
• Transaction data is sent to your bank and onto a card company.
• The bank takes the data and carries out security checks.
• Once cleared, the data is processed and sent back to you and the customer.

And that’s then the end of the transaction! The whole process only takes a few seconds, but there’s a lot of data to manage in a short amount of time.

But that’s the brilliance of this modern technology. In around three seconds it’ll process reams of data, encrypt it to ensure security, and communicate with a customer’s bank. And like that, the transaction is complete.

It really speeds up the payment process and will modernize your business, as well as going some way to future-proofing it. Payment processing is the future for SMEs and larger businesses as it streamlines online sales and makes it seamless and reliable for you and your customers.

If this sounds ideal for you then what are the top payment processing companies for small businesses?

Well, there are some big names out there that deliver the service. But FasterPay does the same and is a little different, striving to provide pay equality between businesses and customer. It’s the faster, easier, and more secure way to get paid.

Top payment processing companies online offer a service that covers all customer bases and does so in an ultra-secure and fast way.

So, how do you go about taking advantage of this innovative tech? Here’s the lowdown.

How to setup online payments for small businesses

Once you’ve made a decision on the methods you want to use, you’ll need to setup your payment options across your checkout.

To create an online payment system for your business, you’ll need to sign-up with a third-party provider to deliver different payment options.

With FasterPay, for example, it’s just a case of signing up and then you have a free business account.

After that you then have various options to accept different types of payments on your site. If you’d like to know more, you can read our full guide to running FasterPay for your business.

An alternative approach is to sign-up for a merchant account.

This is a bank account that you have specifically for your business. And with it you can manage your online payments.

To do that, you’ll need to apply for the merchant account, which is a straightforward process but will require you to have various business documents available.

You can also accept credit card payments without a merchant account—check out our guide on how you can do that.

The processes behind online payment methods

It’s worth considering what happens with certain payment methods and the options they provide your business with.

So, we’ll take a look at the ways they work for you and help your customers to make online transactions. Credit card payments

With this, you can add simple payment forms to your website. This is the payment gateway aspect, which will process customer information to make a quick and secure transaction.

With the gateway, you’ll be able to host a payment form and ensure secure payments.

You can also store the payment details of customers, should they opt into this feature.

Accept echeck payments

With a direct transfer, you can let clients transfer their funds to your bank account with an eCheck.

These allow your customers to use the digital equivalent of a paper check to enter data into an online form to complete the direct transfer.

The good news here is check fees are often lower than those for credit card payments.

Mobile payments

If your small business isn’t in an office setting, but you want to accept payments on your website, mobile payments are a great solution.

To accept these, you need a mobil card reader. These plug into your phone (or with bluetooth). Alongside the mobile app, they process card details through a phone to take payments.

And this can happen from anywhere across the world.

Click-to-pay email invoicing

Are you using a cloud-based accounting solution? Then your customers can submit payments through email invoicing.

When emails are forwarded straight to a customer’s email, then they can click on a link to quickly pay an invoice.

This process greatly simplifies the payment process for your business and customers, with a handy reminder to them they have a bill to take care of.

Automatic bill paying

For credit and debit card payments, you have the chance to provide customers with an easy way to submit payments.

That’s through automatic billing. These can be scheduled for a monthly or weekly basis, with invoices arriving from payments your customers can setup to reach you instantly.

This is a great approach for you and your customers as it simplifies recurring billing. Customers only have to setup their payment date and the rest is automatic, providing them with peace of mind.

And for your small business, it reduces the opportunity of churn rates.

Security and online payment systems for small businesses

Naturally, protecting your business’ and customer data from fraudsters and other malicious online activity is essential to long-term success.

And with online payment methods, your small business can have immediate access to the latest security measures.

So what’s the safest payment methods for small businesses? Certainly a payment processor offers one of the most advanced options available to you.

For example, FasterPay’s various features (digital wallet, payment gateway, and more) are enhanced with fraud stopping technology.

• We meet the highest payment security and anti-money laundering standards in the world.
• We’re a PCI DSS Level 1 certified platform (this is the set rules for governing online payments).
• We’re licensed by the UK’s Financial Conduct Authority (FCA).
• We’re compliant with the rules and regulations of the Financial Crimes Enforcement Network of the US Department of the Treasury.

We have a guide to why FasterPay is safe to use that’ll help you understand more about how we protect your data.

Considerations for choosing a small business payment processor

There are multiple considerations to keep in mind when picking the payment processor for your small business. These include:

• Cost and fees.
• Technology and equipment payment types.
• Transaction speed.
• Security features.
• Customer friendly experience.
• Ease of use for businesses.

What you want is a platform that delivers myriad enterprise-level features simultaneously and in a dynamic package that future-proofs your brand and will help you to scale up.

The benefits of using online payments for your small business

And so to the many reasons exactly why you’d want to take up using online payment methods for your small business.

Some of the advantages we’ve already covered above, but we’ll gather them all below (along with other benefits) so you can get an understanding of the competitive advantage your business will enjoy.

• Receive faster payments: Online methods are simply much faster with their processing times than, for example, a check.
• Offer customers flexibility: Meet the expectations of your customer base with a wide range of payment methods.
• Maximize security: The likes of payment gateways are ultra-secure, offering multiple layers of security measures to protect customer and business security.
• Save time and money: Payment processors handle a lot of the time-consuming work for you, managing transactions in seconds at cost-effective rates.
• Get real-time reporting: With online payments, your small business will receive important insights into every transaction with real-time reporting features.

In short, online payment methods such as cards and alternative payment methods provide your small business with more time, money, and greater customer satisfaction.

Making the step to utilizing them to support your business ambitions, and to meet customer needs, is the all-important step for your long-term competitive prospects.

FasterPay will grow your small business

Ready to try out a digital wallet that’ll streamline your payment requirements and make online store payment methods a cinch?

All you need to do is create a free FasterPay business account now and get started right away. The app is available on:

• Google Play.
• App Store.

Any questions? We have our 24/7 customer support team waiting to answer them: support@fasterpay.com.