What are The Various Types of Payment Options Available for Small Businesses?
There are major three of debit cards:
When people choose to pay with any of the above, the amount they spend gets deducted directly from their bank balance. All types of debit cards function in a similar way: the customer pays with their card (through chip and PIN, contactless, via telephone or online) and then the money withdrawn directly from the account.
Debit cards can be useful as an alternative for carrying cash, but research shows people spend more on impulse with plastic, as they`re less restricted.
Credit cards are similar to debit cards but the key difference is customers paying with credit i.e., amount will paid after sometime in future date.
When someone takes out a credit card they`ll be given a credit limit - the amount they`re allowed to spend and when they use it they`re agreeing to repay the balance plus interest. The three types of credit card users are:
- American Express
With a credit card people can pay online, using chip and PIN, contactless or via telephone. Credit cards can be useful for splitting the cost of higher value purchases but comes with the risk of people spending money they don`t have and might struggle to reimburse.
Pre-paid cards are an option to carry cash. They can be used in a similar way to debit and credit but the persons don’t bother need an account to have one. Instead, they`re loaded up with cash as and when required - similar as a pay-as you go smart phone.
Pre-pad cards can be used to pay online, using chip and PIN or contactless, so they deliver the flexibility of other plastic options without the risk of adding debts. However, there will be associated expenses for the customer.
Contactless payments are on the up and they`re popular because of how quick and simple they are to completed. Customers needs tap their card or telephone on the card machine.
Contactless payments can be made with a credit, debt or pre-paid card, or by using a smart phone. The disadvantage to this way is the concerns over how simple it would be for a thief to spend money using another person`s card, and thus, contactless card transactions are restricted to £30.
There are two ways people can pay using their telephone.
Apple and Android Pay
If they pop their credit or debit card details into their telephone`s `wallet` they can start paying for purchases online or eye to eye in a single click.
With this way, customers aren`t limited to the £30 contactless cap because there are extra security features included - with Apple, a finger print is needed and with Android, a password. The technology works using RFI and NFC Technology.
The subsequent way people can pay using their phone is by giving their card details out while on the line, which, as far as you might be concerned, is a great way to accept payments from a remote place.
This can work using a virtual terminal – when the details are provided and you pop them into the terminal on your end. Virtual terminals are furnished with the latest security and can be used with all major credit and debit cards.
As of recently cash was still the most frequently used payment method and it`s most usually used for ordinary lower-value purchases - like that chocolate bar from the corner shop or a train ticket. It`s quick to use and you get your money there and afterward, so you know precisely where you`re up to.
From your customer`s viewpoint, one of the pros of money is it restricts their spending fairly as they`re less likely to splurge when they have a limited amount of cash in their pocket. However, when it comes to getting money it can slightly less convenient as they must find an ATM, request cash back or head to the bank.
Cheques are becoming into a perishing breed and their prevalence dropping each. They`re a paper voucher connected to people account and are commonly used to take care of bills or tradespeople.
Using them is simple and free of charge, but it`s up to the people writing the cheque to guarantee there`s sufficient cash in their account to take care of the expense, so you should never acknowledge.
Online banking or internet banking can be used to make a wide range of payments. The customer should join with their bank before they get started but once they`re fully operational, it can be used to transfer money to anybody they need, directly from their bank account.
With online banking, direct debits, standing orders or one off payments to anyone can be set-up.
A simple way for a customer is to pay for goods online is by means of a link sent in an email. The person selling the merchandise makes a custom link, sends it to the customer and whenever it`s opened, they`re taken to a safe payment page where they can complete the transaction without the need for any interaction.
An epos system should be able to handle all types of payments because your customers can use any of the above mentioned ways of payment methods. If you don’t have the payment of your customer’s choice then they may be disappointed leaving them unhappy and frustrated which can cost you losing a customer.