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!