The primary aim of any business is profit-making. However, profit can only be made when customers pay for the services offered by businesses.
With the increasing competition and greater emphasis on consumer satisfaction, business owners are obligated to provide multiple channels for payment collection.
There are two conditions that every channel of payment provided by small businesses must meet.
● Convenience
It is good business etiquette always to put the customer first.
Customers must never find it difficult to make payments.
Small businesses must ensure that customers can make payments with ease by providing them with all the necessary information that they might need.
● Flexibility
Small businesses must also ensure that the payment methods provided are flexible.
Customers must be able to make payments at any time and their leisure.
Taking the factors above into consideration, there are five effective payment methods that small businesses could use.
1. Cash
2. Cheques
3. Mobile Transfers
4. Point of Sales (POS)
5. Online Payment Systems
Cash
At least 5 out of every seven persons you see are carrying cash. Good, old, physical cash.
As one of the earliest forms of payments, physical cash is the first choice for most customers.
Although cashless transactions have become increasingly popular, a significant percentage of business transactions are still completed using cash.
Small businesses must make provision for customers to make cash payments.
Accepting cash payments requires that small businesses have the personnel to accept payments from customers, issue receipts, and provide change.
Cheques
Customers should also be able to make payments with cheques.
Some customers may not be able to make payments immediately, so they issue checks instead.
Just as for cash payments, small businesses must have personnel available to receive checks issued by customers.
Checks can be cleared at the right bank to receive the cash equivalents.
The cashing of checks might incur extra costs for small businesses. These costs could be borne by the business or transferred to the customer, making the payment.
Bank Transfers
Small businesses must be able to accept payments made using mobile devices.
Many people now have their bank accounts linked to their phone numbers and can perform financial transactions using short-codes or banking applications.
To facilitate payments via bank transfers, small businesses must make customers aware of this payment option and provide the relevant account details.
Bank transfers are speedy, convenient, and significantly reduces the need for any physical interaction.
Point of Sales (POS) Device
Credit cards are gradually replacing the cash found in purses and wallets with lots of individuals having at least two at one time.
Credit cards are sleek, light, and convenient to carry about.
Since many customers move about with their credit cards, it is good practice for small businesses to make Point of Sales (POS) devices available.
Using Point of Sales (POS) devices, customers can make payments by swiping their credit cards. Some of these devices also allow card-less transactions to enable customers to make payments without their credit cards. Furthermore, POS (Point Of Sale) devices can create marketing and sales opportunities to increase customer engagement and boost revenue by offering 24/7 services.
However, there must be a business representative available to guide customers through the process.
Point of Sales (POS) devices are usually issued by banks and are very easy to operate.
Online Payment Systems
By using either credit cards, tokens, and coupons on mobile applications or websites, people can now make payments on the go.
Small businesses could use a payment system such as PayPal, Stripe, or Braintree to receive payments in foreign currencies and from customers worldwide.
Most of these payment systems allow businesses to automate the entire payment process, removing the need for physical interaction.
Besides the basic financial services offered by other payment methods, most online payment systems also have the following features.
● Data Encryption
Sensitive customer data such as card details are encrypted by these online payment systems when making payments online.
● Fraud Prevention
Most online payment systems adopt stringent security measures to block fraudulent transactions.
● Payment Tracking
Online payment systems allow small businesses to track payments made with the data they provide.
● Consolidated Reports
Most online payments provide small businesses with consolidated financial reports by tracking their transactions.
Since many online payment systems are available across many mobile platforms and can also be accessed on the web, customers can make payments at any time.
These online payment systems also integrate other e-commerce platforms that are popular with small businesses.
Read More: 6 Tools Your Small Business Needs To Survive
Conclusion
With the rate at which financial transactions have evolved, payment collection should not be a problem for a small business. However, small business owners must use a payment method that is suitable for their businesses.
The benefits of adopting alternative payment options are;
● Small businesses can rake in more profit.
● With these, more transactions are completed thereby increasing revenue.
Use these effective payment collection methods to close more deals, satisfy customers, and expand your business.
