Will that be cash or charge?
When was the last time you heard that phrase? Or - and here’s a bigger throwback for you - when someone asked if you wanted to pay by check? It seems wild that just twenty years ago, we could walk into the mall (remember those?) and leave with a new pair of shoes simply by putting our John Hancock on a slip of paper (with the logo of our favorite football team in the background) that may or may not clear once it hit the bank.
How we pay for things continues to evolve, and as a small business owner, you must understand how these changes affect your bottom line. (Spoiler alert: It ALL affects your bottom line.) We now have cash, credit cards, debit cards, ACH payments, checks, mobile wallets, and various peer-to-peer payment and online platforms to choose from.
So which ones should you accept? And which of them should you kick to the curb?
The jerk-knee response is, “take them all,” right? You want to make it as convenient as possible for the most people to pay you, otherwise, you’re leaving money on the table. That’s not the wrong answer. But it also might not be the right answer. (Confused yet?) As we said, you need to be aware of the pros and cons of each to make the best decision for your business.
By far, credit cards are one of the most popular forms of payment these days. While cash is still used most often for transactions under $100, its popularity continues to slip. The average person has four credit cards, accounting for 81% of transactions in 2020.
Why You Should Accept Credit Card Payments:
The Downside of Taking Credit Card Payments:
So while credit cards are a popular and convenient choice, bear in mind that it comes with some strings attached. Regular analysis of these fees will help you protect your profit margins and reduce costs.
Whether you run a brick-and-mortar store, operate only in the ethernet, or do a bit of both, there are some additional options on the table. We won’t spend time on cash or checks (those are pretty obvious), but instead want to highlight some of the “new(er) kids on the block,” so to speak. Are they worth looking into for your business?
Apple Pay and Google Pay: These options allow consumers to store the credit and debit cards of their choice on their Apple or Google pay accounts.
PayPal: No longer just for eBay purchases!
Venmo: What originally started as a way to allow friends to split the bar tab has quickly morphed into a very popular method for small business owners to get paid.
Amazon Pay: There’s a reason Amazon does so well, and it’s not (only) because of its 2-day shipping. The one-click ordering makes it super convenient to purchase just about everything, and you can harness that same convenience for your own gains.
Ultimately, you want to strike that balance between keeping it simple and convenient for the most people to pay you - while still protecting your bottom line. Your industry, your customers, where you operate, and what you sell are all going to play a significant role in the decision-making process.