The business world utilizes electronic payments more than any other payment option. According to research, “In 2019, digital and mobile wallets accounted for 41.8 percent of global e-commerce payment transactions. This share is set to increase to 52.2 percent in 2023, making digital wallets the most popular online payment method worldwide. Credit cards were ranked second with a 24.2 percent market share in 2019.” Statista Research Department, Nov 27, 2020

As a small business owner, you will see more demand for it as time goes by, and being well-versed in today's electronic methods of payment will greatly add to your profit and customer experience. For the uninitiated, there are multiple forms of electronic payments and each method has benefits a business owner could use to their advantage. You may have heard about EFT, ACH, and wire transfers, but what are they exactly? And which is best for your business?

In this article, we cover each method of payment so you know what to expect. Whether you are a consumer-to-business company (B2C), a business-to-business company (B2B), or handle low or even high-dollar business, these options can offer different benefits that boost your growth.

EFT vs. ACH vs. wire transfers: the key differences

The main types of electronic payments outside of credit cards are as follows: EFT, ACH, and wire transfers. Each of these methods has a few differences that will lead to a different outcome for the business using them. So take a moment and let’s go over each of them so you have a firm idea of how they work and would impact your business.

What are EFT Transfers and payments?

An Electronic Funds Transfer (EFT) is an umbrella term for electronic payments for Canadian audiences. A check processing solution used primarily in Canada. It consists of a vetted network of banks that process at speeds compatible with credit cards.

How payments are completed via EFT

During a sale, electronic payments are made between a business and customer's financial institutions with the aid of a Merchant Service Provider or a Third Party Payment Processor (TPPP). The funds are approved and completed using internal payment networks. Common examples of these financial networks are Visa and Mastercard.

Merchant Service Providers

Now as a business, the person who facilitates electronic payments for you is a Merchant Service Provider - also referred to as an Independent Sales Organization (ISO) - is a company that links you, the merchant, to your bank to receive your customer's payment. To use a Merchant Service Provider, you will need a business bank account to receive these funds.

Your Merchant Service Provider uses payment gateways within your in-store terminals or e-commerce website to collect the payment information, encrypt it, and forward it to the customer's card issuer for approval. The approval is then sent back to fulfill the purchase to your bank.

BNG Payments, for example, is a Merchant Service Provider, working in collaboration with payment processors for a full range of payment options, such as B2B payments, cross-border payments, and international payments.

Third-Party Payment Processors

A Third-Party Payment Processor (TPPP), also known as a Money Transmitter, is an entity that handles payment processing with many of the same benefits of a Merchant Service Provider, but it works exclusively on your website for online orders. Since it handles the fund receiving, you aren't required to have a business bank account. You simply accept the funds into any account you like when withdrawing from the processor.

In this case, your check-out page is hosted and managed by the outside service - not you or your Merchant Service Provider. All sensitive data and payment details stay with the provider who also assumes all security responsibilities. Some examples of TPPPs are PayPal and Google Checkout.

Cost of Merchant Service Provider vs. third-party payment processor: which is right for you?

Benefits come down to what works best for your business structure, the number of payment options you want to provide (a brick-and-mortar store would benefit from more payment options than an e-commerce store allows), and how much control you want over customers data.

With either option you choose, a reliable vendor provides cost assurance and cost guarantees so you know exactly what you are paying for services.

What are ACH transfers and payments?

An Automated Clearing House Network (ACH) is a subset of electronic payments that differ from other methods like credit cards and wire transfers.

An ACH is a direct deposit or withdrawal of funds related to your bank account. It is used often by accounts payable departments to create paychecks or in paying debits like auto payments, credit card payments, utility payments, tax refunds, and mortgage payments. Just like the name indicates, these payments are "automated," moving back and forth from your account by getting your initial authorization. The institution initiates recurring payments on set dates. In the case of withdrawals, they typically happen monthly. An ACH is often termed as a direct deposit, direct pay, and autopay.

An ACH is an ideal solution for reliable payments to avoid late fees while providing prompt and regular paychecks. It provides payments in batches – set times during a day. It used to be that batches were limited to a single batch per day, but today's batch processing vendors initiate payment movements three times a day.

The standard timeframe for payment completion is three to four business days, though today's ACHs are eligible for same-day processing and executed by 5 p.m. at the receiving bank. This may sound like a wire transfer, but because it works differently it has different guarantees. During a purchase, there could be an issue that requires canceling the funds, and if you are in a business of fast cash movements to vendors after sales, this can create a mess for you financially.

How are ACH payments different from credit card payments?

ACH payments are direct bank-to-bank transfers of a person's existing funds with the aid of an MSP or TPPP. Credit cards function similarly but are a line of credit. The card provider, with the help of an underlying bank institution, loans you funds and you pay the provider back, with a bill due every month.

Due to these being loans, the providers attach an APR and require a minimum payment to pay off any funds used. A credit card is a bit different from a standard loan in that it provides an ongoing line of credit after your loan payment transfers that are then renewed automatically once you pay it off.

Unless you pay your credit card bill in full each month, you are charged interest on unpaid amounts. And if you use them for a cash advance, the APR is accumulated daily from the time of the withdrawal (which can add up.) An ACH payment can help you pay off that monthly bill on time to avoid interest.

The cost of ACH payments

Regarding processing fees, a wire transfer costs from $10 to $30 per transaction, whereas ACH payments are significantly lower. Pricing depends on the method and amount sent - as low as $0.10 and up to around $2.50.

Money sent as wire transfers

Wire transfers also called "bank wires" or "money by wire," are money transfer services that send electronic funds which are guaranteed upon arrival. They are sent instantly, rather than as batches at set times.

If you receive a bank wire transfer, your customer's bank has already removed funds from his or her account and the bank has electronically forwarded immediately approved funds to your bank, which then routes it to your account.

Without any delays, these electronic money transfers can be received anywhere a banking or a credit union is, making them ideal for international money transfers; however, the urgent funds come at a cost. Each transfer ranges between $15 and $30, depending on the bank.

With a high dollar amount allowance of around $100,000, these transfers work well as business-to-business transfers, large financial transactions, mortgage payments, or as a fast way to send large sums of money to friends and family, even in the form of international transfers.

The advantages and disadvantages of ACH payments vs wire transfer speed

Both ACH and bank wires can arrive the same day, but wire transfers offer faster payments. They have higher transaction speeds of just a few hours, even for international transfers.

Guaranteed funds

Wire funds are withdrawn from the sender's bank account before the wiring process begins, which means the funds are guaranteed upon transmission, but it also can't be reversed, which is why wire fraud can be particularly damaging. Unless you are sure of who is receiving your funds, you can be facing significant risk.

With an ACH payment, the funds aren't guaranteed before the transaction, and this gives you some wiggle room during the transaction process. Funds can be returned to you as well. (Certain standards apply.) But when receiving funds from a customer, a wire transfer gives you the most assurance.

With a wire transfer, you can send and receive large sums of money, such as $100,000. Whereas, ACH typically has a limit of around $25,000.

Which is best for your business: ACH payments or wire transfers?

Knowing which payment practices are best for you depends on your overall business needs and the costs for those services compared to their benefits, but this article gives you a good general understanding of which you should apply most frequently.

When analyzing pricing, keep in mind the following:

· Cost assurance, so you know exactly what you pay for.
· Cost guarantees
· The lowest costs vs. services offered
· Closing costs for contracts
· Cost of Transfers / Transaction Fees

Have more questions on which electronic payment is best for your business? Reach out to our team and we’ll be happy to guide you to the right payment processing solution for your business.

If you’re looking for the single best way to take payments online, the short answer is that there isn’t one. Now more than ever, customers are making more online payments in 2020 compared to previous years, and more businesses are looking for ways to make it easier to collect money.

In particular, mobile payments are on the rise. The number of consumers making mobile purchases doubled from 2010 to 2017, making its way up from 7% to 17% of customers. In order to offer your customers the best experience, it is best to offer multiple ways to take payments online if they are offered at all.

With so many different types of businesses, many require different types of online payments that work with their industry.

Customers can use an average of 3.6 different payment methods each month to pay their bills. Being able to offer multiple billing and payment methods for your customers increases customer satisfaction and reduces the amount of time it takes for your business to get paid.

Here are some of the types of payments your business can take online.

1. Accept Debit and Credit Cards

One of the most common types of online payments is offering the option the pay via credit or debit cards. In order to offer this feature to your customers, it is best if you have either your own dedicated merchant account or intermediary holding account.

A dedicated merchant account is provisioned specifically for use by your company, while an intermediary holding account (or aggregated account) such as that provided by PayPal makes use of a single merchant account to provide credit card processing capabilities to a whole host of other companies.

Visa, Mastercard, and American Express are all among the most widely accepted credit cards in the business. Visa even accounted for 47% of credit card transactions in 2015, while Mastercard and Amex clocked in at just 21% and 12% respectively – nationwide. In addition, Visa and Mastercard debit and credit purchases are projected to increase in value by billions of dollars by the end of 2020. Visa will be worth $114.1 billion and MasterCard will be worth $47.8 billion.

Accepting debit and credit cards is one of the easiest ways for your company to accept online payments.

2. Accept eChecks through ACH Processing

The second most popular way to accept payments without going through a traditional bank account is through using an eCheck – otherwise known as an electronic check, these allow your customers to input their information the same way they would from a paper check. Customers can enter their routing/account numbers, name, the amount of money they’re trying to send, and their authorization for the transaction in an online payment format similar to what one might encounter on a software interface. There is no paper check to be found here because electronic checks payments require no paper.

Some potential upsides to using eChecks over credit cards can include lower transaction fees and more security. ACH processing is governed by the National Automated Clearing House Association and has different, lower transaction fees than credit cards. In addition, they’re much more secure and predictable than credit card payments.

3. Mobile Payments

Sometimes, you may need the ability to take payments from your phone or mobile device, even if you predominantly sell items from an online store. As many businesses continue to grow, the ability to process credit cards physically through a mobile device are viable options for making payments online. In fact, these kinds of mobile payments are becoming the norm for many customers and businesses. Payments are instantly confirmed and an email receipt is sent immediately. Mobile payment apps offer this feature in addition to a whole host of others, including the ability to access cash flow reporting, manage customer accounts, and send invoices from anywhere there is a phone signal.

In a 20% increase from 2014, 79% of households reported having at least one smartphone in the house. That’s up from 59% in 2014. Chances are, if you need an easy way to take a physical payment, all you may need is your smartphone, and a type of processing app and a swipe reader.

In order to circumvent security concerns customers might have about storing their credit card information on a mobile app, your company should consider offering a secure payment acceptance method in order to provide more value to your customers. There is a proper way to handle credit card information.

4. Click-to-Pay Email Invoicing

Being able to send your customers an invoice by email makes all the world’s difference. It’s much more convenient than asking them for their credit card information via phone. Sending your customer’s invoices by email allows them to pay with just a few clicks, and they can receive a receipt/instant payment confirmation within seconds.

Online payment forms can be shared with customers via email for even easier payments. You can streamline your reporting and manage your data securely using click-to-pay email invoicing. With a fully integrated experience waiting for you - including email, web payment forms, and customer databases – you can better manage your customer’s data. When they hit “pay”, the invoice is immediately and automatically marked as “paid” in your system.

Email invoicing is also much more environmentally sustainable than paper checking. Up to 60% of customers have stated that their expressed concern for the environment is a major factor in their decision to pay and view bills online. In order to get more customers to transfer from paper checking to email invoicing, harp on the convenience and environmental sustainability of email invoicing as compared to paper checking. The value of email invoicing is inherent in its time-saving nature.

5. Recurring Billing

An increasingly popular method of paying for monthly services, including gym and child care services, is to use recurring billing. A recurring billing system is much more convenient for your customers and guarantees that your business is paid on time. Staying on top of finances and payments is a large issue for customers.

Up to 35% of your customers are worried about properly keeping track of their finance due dates, while up to 29% of customers are worried about the possibility of being unwittingly late on payments. By sending email reminders or having customers pay on a recurrent basis, it is easier for businesses to increase customer satisfaction while simultaneously making their customers’ lives easier.

Why you need an online payment gateway for online payments

Now all of the above payment methods require a special piece in addition to a merchant account, and that’s a payment gateway. These are a virtual portal that makes it safe to store payment information and transfer data.

Being able to offer your customers an online payment form enables them to pay you with ease and even allows you to accept payments by credit card, debit card, and ACH payments. When you work with a brand that processes payments and has web experience, they can help you set up an online payment form.

It is both easy and necessary to begin accepting online payments. So while there is no best way to accept payments online, the list of options for how to do so is constantly growing. Continual evolution has made the practice of accepting payments online not only mainstream but commonplace, and you’d be remiss to find a successful business that doesn’t have a credit card terminal (or eCheck capabilities, or email invoicing, or mobile payments). Don’t hesitate to reach out today with any questions or concerns for us!

EBT stands for “Electronic Benefit Transfer”, and is just another form of payment, so why wouldn’t you accept it?

EBT is basically the new replacement for Food Stamps, which work as a prepaid card for individuals to buy necessities.

Sometimes it’s not a matter of if you should or shouldn’t take EBT payments, but if your business even qualifies.

EBT payments come with some requirements your business needs to meet before you can start accepting this form of payment. But it’s worth seeing if your business qualifies since it draws in additional revenue.

So what kind of requirements does your company need to meet to accept EBT benefits?

You’ll need to sell EBT qualifying products

Unlike credit card companies who do not set restrictions on what a business must sell to accept payments, EBT and similar state-run programs have strict credentials.

Stores that sell grocery items may qualify, like supermarkets, specialty food markets, convenience stores.

As a grocery store, you’ll want to carry the relevant items, such as:

• Meat, poultry or fish
• Bread or cereal
• Vegetables or fruits
• Dairy products

Chances are, you are already carrying these items and may qualify, but carrying some items is not the only requirement.

SNAP, another prepaid food program, offers an accurate list of how merchants operate to accept EBT payments.

“(A) Offer for sale, on a continuous basis, at least three varieties of qualifying foods in each of the following four staple food groups, with perishable foods in at least two of the categories:

Or

(B) More than one-half (50%) of the total dollar amount of all retail sales (food, non-food, gas, and services) sold in the store must be from the sale of available staple foods” (USDA Food and Nutrition Service).

Should you apply?

Accepting EBT payments can be a way to accept more payment options and draw in additional customers.

If you offer EBT payments, you’ll be able to draw in additional customers who otherwise couldn’t shop at your store. Their purchases would have gone to a competitor that offers EBT.

Look at the EBT information site here, to see if your business qualifies as an EBT merchant, and widen the revenue stream for your business.

Are you unsure if you’re getting fair processing rates for debit and credit cards?

Contact us, and we’ll be happy to let you know if your rates are the best possible.

Fundraising is the lifeblood of all non-profits, and contributions are necessary to continue your work. So how can you broaden your horizon and work to gain more donations?

Facebook could be your answer.

In comparison with the other social media sites, Facebook has been ranked as number one when it comes to effective outreach tool for gaining donations.

So what steps should you take to get donations through Facebook?

Set up on Facebook.

First off, Facebook doesn’t let you set up a donation app on a personal Facebook page, so make sure you create a business page for your organization.

Secondly, Facebook will not let you add a donate button on your business page unless it’s set up as a non-profit. You won’t be able to add the Donate App or even see it as an option unless your page is a non-profit.

You can easily see the “Use App” button located on the top right of your non-profit’s Facebook page, so you can select that, and then choose the Donate App.

Now that feature will appear on your non-profit page.

You’ll have to enter the required criteria and search for your organization to make sure your page is correctly set up for donations.

Once you enter the correct information, you’ll need to enter the URL for the page on your website you want to direct traffic too.

***Make sure you test the link and know it’s working properly.

What happens next?

Once your Facebook page and donations button has been created, make sure your website is equipped to take online payments through a payment gateway. The last thing you want to do is discourage people happy to donate to your cause and make them jump through hoops.

Having a payment gateway that integrates with your website can increase the number of donations you receive.

Need help taking donations on your website?

We can help you take payments through your site, giving your organization a wider reach. We can work directly with multiple payment methods to assure your business has the best tools possible to receive donations for your cause.