For small businesses, providing as many ways as possible for customers to pay is essential. In the pre-credit card days, cash or check were the simple options. Then credit and debit cards appeared. But for many small and very small businesses, the cost of processing these payments can be prohibitive, not to mention the initial costs that are often involved with obtaining the equipment.
Services like PayPal have, for some time now, offered small businesses an online payment system that allows them to accept credit card payments via the Internet, which has, of course, opened up the potential for many to sell online.
Now mobile phone applications are making an entry into the payment space in a way that will definitely benefit small businesses.
Square is an excellent example of this. It is an application and a small piece of hardware that attaches to your phone. The hardware is the card reader that allows you to swipe a customer’s card. The software processes the payment through the Square payment gateway at a cost of 2.75% per transaction, no other fees are involved. The hardware is provided free and is compatible with most smartphones and the iPad.
This is an incredible leap forward for the small business environment. Even businesses as small as single person craft stalls, educational tutors visiting homes, or basically anyone who previously could only accept cash or checks can now accept credit card payments. Services like Square give small business owners the ability to be more flexible, and the more flexible they are the more customers they are likely to attract.
Micropayment systems like Venmo are also enabling small businesses to transact in ways that were previously completely out of reach for them. Businesses that have previously been cash-only can now accept payments via smartphones.
This is especially helpful for small businesses that were, because of the small amounts per transaction, forced to carry reasonably large sums of money. Those businesses can now see a future where the daily float becomes a thing of the past, or at least that the size of the daily float is greatly reduced. This makes small businesses a much less attractive target for crime, and frees them from only servicing clients with change in their wallets.
Has your business started to use alternative payment methods yet?