Choosing a Payment Method for Your Business: Is Electronic the Way to Go?

Deciding which payment methods to offer customers is an often overlooked area of business. Many small businesses begin by accepting cash-only payments, while others venture early into the ever-growing world of electronic payment. The truth, though, is that cash payments have been on the decline for years, with just 37% of surveyed Australians paying this way in 2016, notes the Reserve Bank of Australia. Back in 2007, this number was 69%!

There’s no question that, at least for the time being, cash is clearly still an important part of our transactions, but it may be worth it to your business to consider offering electronic methods, as well. Electronic payments benefit both the business and the customer. The ATO’s research shows that a majority of businesses believe electronic payment systems have helped with their record keeping and with cutting costs. Plus, this same research found that half of surveyed customers actually feel inconvenienced when a business is cash-only. That certainly isn’t the kind of impression you want to leave on your customers.

So, if you don’t yet offer electronic payment choices, or if you do already offer such options, but want to expand them even further, what exactly are your options?

Debit or Credit Card Payments

The classic way to pay electronically, debit or credit card payments may just become essential to your business as time goes on. If your business is online, you can use a credit card payment gateway to process your transactions. Companies such as Stripe or Paypal allow customers to safely and easily make online payments, but both do come with small transaction fees.

For offline businesses, you might consider a card reader for your mobile phone, tablet, or similar device. These card readers attaches to a device that goes into your phone, turning it into an instant credit card reader. Popular options include Square and Paypal Here. Both options have certain fees, pros, and cons, with Square offering a complete point-of-sale experience, and Paypal offering a more straightforward card reading product. Both systems do allow you to take chip cards. You’ll want to research these card reading services to ensure that you’re making the right choice for the needs of your business.

Tap and Go Payments

Tap and Go, otherwise known as contactless payment, is another popular trend. Working with digital wallets like Apple Pay and Google Pay, customers can wave or tap their mobile device over the reader. This form of payment is faster than chip reading, and considered to be much more secure (along with chips) than traditional card swiping.

Consider Gift Cards

A great electronic way to get customers excited about your business is to offer gift cards. Most card reading services, including Square, offer a gift card option, allowing you to customize and sell your own gift cards. This is a great way to boost your sales and promote your business, particularly during the gift-giving seasons, like Christmas.

What About Surcharges?

Since there is a cost involved with each credit or debit card transaction, it’s understandable that small business owners would want to offset that cost in their sale. However, it’s important to remember that the Reserve Bank of Australia has very clear rules regarding surcharges for cards like Mastercard and Visa. Businesses may not charge these cardholders excessive surcharges. Businesses may only charge customers what it actually and reasonably costs to accept the customer’s particular card. Of course, you aren’t necessarily required to include a surcharge at all, and it’s worth noting that while companies such as Paypal are not part of this surcharge ban, many do have their own policies regarding excessive surcharges. This is another area in which you’ll want to research and tread lightly.

Keep Improving Your Small Business

The jump from cash to credit is just one more step on your pathway to business success. Keep up the progress with TCA Darwin’s business improvement services. Book a free 30-minute session today to learn more about how we can help improve your business with technology solutions. Plus, we can even let you know if your business qualifies for certain grant funding initiatives. Appointments are available at both our Stuart Park and Palmerston offices.