What are the best online payment options for small businesses?
Everything you need to know about the best online payment options for your small business, including the standout features of each payment service and how to choose the right option.
6 April 2021 · 9 min read
When it comes to accepting and processing payments, small business owners have a wide array of options at their disposal. These can range from the traditional payment options like cash and bank transfer, to new and exciting FinTech systems and even cryptocurrencies.
But how exactly do you know which ones are the right fit for your business?
If this is your first time running a small business, you might be thinking of just accepting any form of payment— as long as you get paid. But in reality, this is a dangerous precedent to set. Payment methods come in different forms, some less valuable and some just downright unprofitable with the level of risk and exorbitant transaction fees that they charge.
In this post, we’ll cover everything you need to know about the best online payment options for your small business, including the standout features of each payment service and how to choose the right option.
Let’s dive in.
Breaking down online payment options
You might think that online payments are only useful for ecommerce businesses. But as the world goes more digital with each passing day, it’s not uncommon for any business with an online presence to have at least one payment gateway for a smoother checkout process.
Additionally, online purchases can occur in physical stores too using mobile apps or digital wallets that store the user’s credit or debit card information on their mobile device.
This development has been further bolstered by the fallout from the COVID-19 pandemic. Everywhere you go, physical distancing and contactless transactions are the new norm. Besides, if you really think about it, shouldn’t all business owners be interested in ensuring a quicker, more seamless payment system for their customers?
What are the main benefits of utilizing online payments?
These online payment gateways and methods offer a number of benefits across the board. For one, they make the buying process simpler and much faster. In just a few clicks or taps, you’ve made your purchase. Other benefits include:
The user also gets to pay the exact amount, meaning there are no hassles involved with going to look for change as with cash payments. They also don’t have to go all the way to the bank because they want to make a check payment.
Receive payments faster
If you were receiving a check payment, you may have to wait a couple of business days for the payment to clear and appear in your bank account. It’s a similar issue with cash payments where, for instance, the payment is made on a Friday evening and you therefore have to wait until Monday for the bank to post it.
Can’t be too careful nowadays, especially with the coronavirus still in full force in many countries around the globe. With online payments, you get to perform paperless (and therefore touch-free) transactions from the comfort and safety of your home.
Possible rewards and rebates
This is a very common occurrence with credit card payments. When you go to purchase something, using your credit card instead of cash can earn you some rebates and increase your reward points.
Online payments are recorded and buyers get a copy of the transaction. This can be useful if they want to track their expenses over a given period.
A single payment gateway can offer multiple payment options
A good example is PayPal, which allows buyers to pay for orders directly with their PayPal account balance or their credit cards. Some apps allow you to use the balance in your phone’s prepaid balance.
Automated payment plan
Not every purchase will involve a one-time payment. It can be hard to track your monthly payments if you had to do it manually. Many online payment solutions allow you to set up an automatic payment plan to automatically debit a user’s account on the agreed-upon due date. A good example is how Spotify automatically deducts its monthly subscription from your PayPal or credit card account.
Why offer multiple forms of payment?
Of course, you can get by with using only one payment method for your small business. Here’s the thing though — what if your potential customer cannot pay using that option? That’s a lost sale already. For Instance, PayPal is not available to users in some countries. If you’re using only PayPal as your payment option, then you can’t sell to potential customers in those countries.
Another thing to consider is that many of today’s consumers expect businesses to offer multiple forms of payment so they can simply use the one that is most convenient for them. This is especially true in the eCommerce scene where customers typically expect checkout options to include some of their favorite payment methods, such as PayPal, Stripe, credit or debit cards, and even cryptocurrencies.
The more your website visitors come to expect this ease of payment, the less time they are likely to spend on some website that makes them do more work just to make a payment.
Lastly, offering multiple payment options promotes trust. Small businesses often have to undergo a number of checks before they can start using certain payment gateways. Some of these apps even provide security seals that the business can put on their website to build trust.
Our top 8 online payment options for small businesses
The digital landscape is booming and there are now countless FinTechs offering various online payment solutions. This is a good thing because as you well know, competition drives innovation. Our main criteria for this selection is the simplicity by which the visitor can make payments, as well as the ease by which the seller receives the money.
There was a time, PayPal and Western Union dominated the online payment industry, but amid high transaction fees and restricted accessibility, startups and small businesses have had to look elsewhere. With that in mind, here are our top picks of online payment alternatives in no particular order:
Payoneer is pretty much a household name across the world, especially in countries where access to PayPal is limited or nonexistent. The platform supports over a hundred different currencies. Plus, there are no charges for receiving payments.
You also get a plastic MasterCard so you can directly withdraw your funds from the ATM or make seamless card payments for your business.
Stripe Stripe features a powerful and flexible API that you can tailor to meet your business’s specific needs at the time. The platform can handle everything from storing payment information for faster checkouts to processing subscriptions and even accepting payments in different currencies.
Another great feature worth mentioning is the platform’s ability to integrate with hundreds of third-party applications with just a few clicks. Security is also topnotch, with the platform having already achieved the most stringent certification level for security measures. Stripe charges transaction fees w2.9% + 30¢ per successful card charge.
This money transfer services company was founded in Iowa in Dwolla in 2010. Signing up on Dwolla is free and users can transfer funds from one Dwolla account to another, much like PayPal. There’s also a mobile app (iOS and Android) so users can make and receive payments on the go.
Dwolla’s powerful API is what earns the platform’s spot on our list. Payments and transfers are focused more on Automated Clearing House (ACH) payments and bank transfers. This way, small businesses can receive payments directly into their bank accounts as opposed to having to withdraw it manually. But the best part — transactions are free.
There are over 113 million Apple iPhone users in the United States alone. That’s a pretty wide target audience, all of whom can use Apple Pay for online payments. Apple Pay is mighty convenient too. The platform utilizes touch ID confirmation, which in turn allows for faster and more secure transactions. For instance, a customer can pay for an item using their fingerprint.
The platform is still growing, but it’s safe to assume that Apple Pay will grow into a leading online payment solution in the US and the rest of the world.
WePay was launched in 2008 as a platform for fundraising and donations. It was used as the money-pooling platform for the Occupy Wall Street movement in 2011. Over the years, it has grown into a powerhouse among today’s online payment options thanks to its intuitive, user-friendly system.
One of the most impressive features of WePay is that your website visitors can make payments directly on the site. Many payment gateways don’t allow this functionality and so the user will have to exit the seller’s site to complete the payment.
B12 Invoicing B12 prides itself on combining AI with expert design work to create stunning, professional websites in the shortest possible time (you can get the first draft in as little as five minutes).
The company also focuses on delivering quality online business solutions, including SEO, scheduling software, eCommerce design, and copywriting. B12 Invoicing is a recent addition to this ever-growing lineup of tools to help small business owners manage their payments better.
B12’s invoicing and payments software is built into your business website so you can generate invoices, send them to your customers, and receive payments all without leaving the site. B12 Invoicing is powered by Stripe and therefore boasts its leading security levels. It supports major debit and credit card payments as well as ACH payments.
B12 customers get to use this software for free without any cap on the number of transactions or monthly fees. However, standard processing rates from third-party integrations will apply.
Visa cardholders will find this payment platform most convenient because they can quickly checkout without having to leave your website or fill in all their payment information. There are over 20 million accounts enrolled in Visa Checkout, so you can be sure that you’re simplifying the checkout process for a considerable portion of your audience.
As consumer adoption grows, more and more brand name merchants are joining in on the action. For instance, even large organizations like Emirates Airline, Marriott, Starbucks, Papa John’s, Walmart, and FIFA all use Visa Checkout to streamline the shopping experiences of their customers.
With over 2.7 billion monthly users, Amazon remains the undisputed leader in eCommerce marketplaces in the US. Simply put, if you run an online store on Amazon, you should definitely use Amazon Pay. The checkout process is quite fast since the platform uses the customer’s Amazon credentials to process payments. No jumping from one site to the other just to complete a purchase.
Amazon Pay also provides peace of mind to Amazon customers because they know it is powered by the company itself and not some integrated app.
Choosing the right online payment option for your small business
No matter which forms of payment you choose, make sure that they are convenient for your customers. Let that be your first consideration. There is no standard comparison chart that can tell you which payment options to implement for your business, but by putting the customer first, you can improve conversions and drive more revenue.
If possible, do a quick survey and ask your customers what payment options they would prefer when patronizing your business.
Another important factor is the security of the platform and payment information. Identity theft and other forms of fraudulent activities continue to plague the system so transaction security and privacy remain a key consideration.
Sign up for B12 Invoicing today!
At the end of the day, it all comes down to what kind of experience you want to create for your customers. Still, don’t forget to consider your business needs too. The best online payment solutions are those that get you paid quickly, have low transaction fees, and provide top-of-the-line security. B12 Invoicing offers all these features and much more.