In the digital age, merchants must navigate a complicated landscape of payment systems. From traditional credit card processing services to a rapidly multiplying number of online payment methods for small business, merchants need to weigh the requirements and costs of each new payment method. Though the process is complex, payment providers strive to make it easier for businesses to implement diverse payment solutions.
To assist you in making the decision, we provide an in-depth comparison of online payment systems Our article explains how to choose the right platform and lists the most popular online payment options.
All The Possible Payment Methods For Small Business
A seamless checkout process is essential for small businesses' success. To make it easier for your customers to pay, you may offer them the following eight payment methods that are known to be the most effective.
Direct Debit
As a streamlined online payment option for small businesses, Direct Debit offers secure bank-to-bank transfers via the BACS network, helps to avoid high transaction fees associated with credit cards and cash payments and enables one-off payments. The Direct Debit Guarantee also provides customers with protection from unauthorised debits. Instant payments can be accepted through the use of specialist providers, although the three working day clearance time needs to be noted.
Card Payments
According to the BRC Payments Survey, most consumers prefer to make their purchases with credit or debit cards. This presents an opportunity for small businesses to tap into a larger customer base. Card payments facilitate a fast checkout process and provide the opportunity for financing larger purchases on credit. However, this online payment solution for small business has certain downsides, such as high fees and chargebacks. Additionally, fraud is a huge issue, which leads to more failed payments. In this case, it is important to use a secure payment gateway to protect customer details.
Digital Wallets
A large number of small businesses are embracing digital wallets as their payment method of choice, especially those in the service industries and start-ups. By utilising mobile point-of-sale systems, these businesses store customer and payment details and issue receipts with ease. E-wallets such as Google Pay and Apple Pay allow customers to make payments with just a tap of their finger, thanks to NFC technology.
Nevertheless, e-wallets may be effective for customers. At the same time, business owners may face some complications, including high charges, the limited number of digital wallets available, and the time necessary to integrate them.
Cash Payments
The use of cash for payments is steadily declining due to the accelerated transition from physical money to digital payments. Nonetheless, some customers still prefer to use cash upon delivery. Why? Even though cash as a payment method is considered less convenient and hygienic, it allows consumers to lower the risk of losing their money and check the quality of the ordered product. Cash offers many benefits, such as immediate payment processing and no associated fees, but it also comes with a higher risk of theft and mismanaged money.
Cheques
Cheques have been a popular form of payment for a long time, but their usage has declined recently due to the rise of online payment systems for small businesses. Businesses and customers alike can benefit from the convenience and security of ACH payments. By utilising the ACH payment network, businesses easily send funds for one-off or regular payments without needing physical debit/credit cards or paper checks. This reduces transaction costs and processing time and enhances payment security. Furthermore, the setup and use of ACH payments are easy, making it an ideal solution for businesses of all sizes.
Email Invoices
It can be a convenient method to receive online payments, especially for independent contractors. By embedding payment links into an invoice, customers can be quickly directed to a payment to submit their payment details. Merchants can utilise automated systems to receive payments and issue receipts. Unfortunately, email invoicing can lead to late payments as the customer must take manual action to settle the invoice.
Mobile Payments
Mobile payments have revolutionised the way merchants accept transactions. This online payment method for small business is rather an extension of existing payment methods, such as digital wallets and debit/credit cards, which have been adapted to mobile devices.
In addition to traditional payment solutions, mobile payments offer money-transferring apps, SMS payments, mobile P2P, and mobile POS. Apple Pay, Google Pay, and Samsung Pay are the most well-known app-based mobile wallets. By incorporating mobile payments, businesses can streamline their transaction processes and provide customers with the convenience, efficiency, and security they demand.
Online Payment Gateways
Payment gateways are a valuable tool for businesses looking to accept payments online. They provide a secure and efficient way to process payments, enabling businesses to focus on providing excellent customer service. When selecting a payment gateway, it is important to compare the cost of the service, the range of payment methods accepted, and the technical requirements to integrate the gateway into the website. Depending on the complexity of the system, the business may need to hire a developer to help with the integration.
Generally, there are three types of online payment gateways:
Hosted – redirect consumers from the online store to the payment service page. After the transaction is completed, the gateway redirects them back to the website, enabling them to continue the checkout process.
Self-hosted – involve the customers entering payment details on the merchant's website in a certain format. The collected data is transmitted to the URL of the payment gateway.
Non-hosted – consumers provide their payment information on the online store's checkout page. The payment is then securely processed via API.
Criteria For Choosing An Online Payment Processing System For Small Business
As small businesses strive to stay competitive, they are turning to digital payment solutions to reduce costs, gain new customers, and simplify accounting processes. But it can be difficult to decide which online payment solution for small business will facilitate the growth of your online store. That is why, below, we have outlined a set of criteria to consider when evaluating an online payment processing system.
Key Features
The key features you have to primarily focus on are the available solutions for payment gateway integration, accepted online payment methods for small business, and the applied security measures (PCI compliance and fraud detection system).
However, before considering any options, you need to clearly define the main requirements and needs of your business since not every payment processing system is suitable for every type of business.
Additional Services
In addition to the standard offerings mentioned above, it is important to consider what extra services are available. These can include subscription support, invoicing, payment links, real-time reports and card readers. Evaluating these unique features can help ensure that the platform is best suited to comply with your payment processing needs.
Functionality And Integration
When selecting a payment processing system, ensure it offers a comprehensive range of integration options. Look for service providers that offer seamless integration with popular eCommerce platforms, CRMs, and accounting software programs. Additionally, check if it is able to connect to your POS if you have one. This way, you can be confident that the chosen payment gateway will be compatible with your existing systems.
Security
Opting for a secure payment system is paramount for small online businesses. It means ensuring the selected payment processing platform has robust security features and advanced fraud protection tools. Customers’ payment data security must be a priority, so evaluating the given options for SSL encryption, PCI compliance, 3D Secure and data tokenisation is essential.
Price Point
Online stores that accept online payments should assess the processing fees and additional charges before selecting an online payment provider for small business. Payment processors feature different pricing models based on the average transaction volume and amount and the payment methods accepted. Common models include flat rate and interchange-plus pricing, which charge merchants a percentage of the total transaction cost. In addition to a transaction fee, merchants may be required to pay a fixed monthly fee, chargeback fee, termination fee, and many others.
The Online Payment Systems For Small Business
After a comprehensive analysis of the leading payment providers, our research team has identified five options. The list below contains the best online payment platform for small business that will help your online store reach the next level of success.
Exactly®
Exactly® is one of the UK leading online payment systems for small businesses. With recurring payments, smart dunning, customisable checkout and easy CRM integration, Exactly® provides an effortless, secure and prompt transaction experience for customers and merchants. Payment links are also available for customers' convenience, enabling them to make payments whenever and wherever they need to. With Exactly®, businesses can also easily import and export data to and from their CRM, allowing them to stay organised and efficient. Simply put, Exactly® offers a range of payment solutions to help businesses grow.
Pros:
More than 150 currencies accepted
PCI DSS compliance and 3D Secure 2
Free customer support
Recurring billing subscription management
Cons:
Merchants cannot test the account for free
PayPal
PayPal has become an increasingly popular online payment solution for small businesses due to its quick setup, user-friendly interface, and visually-pleasing design. Businesses can quickly and easily integrate PayPal checkout into their platform, granting customers the ability to pay with their PayPal account balance, PayPal Credit, a debit/credit card, or a bank account. Though PayPal's services come with a merchant fee of 2.9% of the transaction amount, its micropayments under $£10 are subject to a fee of 5% of the transaction amount and a fixed fee based on the currency. This could be a costly option for small businesses with smaller transactions.
Pros:
Seller Protection Program
Ideal choice for e-commerce businesses
PCI DSS certificate
Fast payouts
Cons:
High chargeback fees
Incompatible with high-risk merchants
Venmo
Venmo’s social commerce platform offers a unique opportunity to build brand awareness, as customers can interact with each other's purchases. Payments can be made with bank transfers and debit cards, although credit cards require an additional fee. Even though Venmo does not charge any monthly subscription costs or setup fees, the Instant Transfer feature does come with a 1% fee.
Pros:
Low fees for card payments
Easy to set up
Advanced integration solutions
Cons:
International transactions are not processed
No payment cancellation
Stripe
Stripe is an all-in-one online payment system for small business that can handle any transaction, including recurring payments. With Stripe, businesses can choose from a wide range of payment options, such as cash vouchers, electronic wallets and bank redirects, and use over 130 supported currencies. This payment processing platform is ideal for businesses that want to make their e-commerce sites more customer-friendly. Stripe offers plug-ins for various platforms, including WooCommerce and WordPress, as well as customisable payment forms that can be integrated into a checkout page. The platform is renowned for its user-friendly interface, straightforward setup and reporting tools.
Pros:
Multiple payment methods supported
Customisable checkout flow
Quick setup process
24/7 phone, email and live chat customer support
Cons:
Open API requires software development skills
Chargebee
For businesses looking to offer subscription-based services, Chargebee is an effective solution. This platform specialises in providing services for subscription billing, with a focus on SaaS companies. It allows users to bill yearly, monthly, and even weekly. As an end-to-end solution, it also offers invoicing, tax management, and international payment services processing. Subscription providers will benefit from auto-calculating prorations for upgrades, as well as a customisable rule set for handling cancellations.
Pros:
Customised price plans and add-ons
Subscription analytics
Extensive library of APIs
Wide selection of offered online payment methods
Cons:
Slow customer support
Limited amount of currencies accepted
Start Accepting Online Payments With Exactly®
Searching for a secure and reliable all-in-one solution for payment processing? Look no further. Exactly® presents small businesses with an unprecedented opportunity to reach new target audiences and increase their sales. We process payments made in all major world currencies and dozens of popular payment methods. Business owners may count on end-to-end security coverage and PCI compliance.
Since our payment system is easy and quick to set up, you can unlock the full potential of cross-border e-commerce and drive the growth of your business. Get a chance to boost your sales by reaching our consultants. The more information is included in your application, the quicker it can be assessed and a price offer provided.
Final Thoughts
Integrating online payment methods into the business workflow not only simplifies the process of receiving payments but can also increase customers’ loyalty and expand the audience. Consumers find online payment solutions such as credit/debit cards, digital wallets, and mobile payments appealing due to their convenience and security. Choosing the right online payment system for small business, however, can be challenging. Businesses should carefully consider their options when choosing an online payment solution, ensuring that it fits their needs and provides a high level of security.
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