Business owners are always hungry for ways to bring in revenue.
Getting paid for products and services is even more important during the pandemic. The best way to encourage customers to pay is to provide digital payment options.
Long gone are the days of paying only by check or cash. Today, customers demand a variety of online payment options.
Let’s look at how to set up a payment system that encourages repeat business and boosts your bottom line.
Setting Up To Receive Payments
Before setting up a payment system, take care of the following:
- Start a business banking account – Don’t use your personal banking account when setting up a new payment system. Bad things can happen when you mix business and personal accounts, especially when it’s time to figure taxes. It also can be difficult to calculate your bottom line and save money for future planning.
- Get a Tax ID Number – Taxes are something every business owner deals with. Remember to request a Tax ID Number from the IRS by completing IRS Form SS-4, which is free. Get a state Tax ID Number as well.
- Register your business name – Every business owner needs to do this, unless the business carries your personal name. Register your name locally and at the state level. Then you can start exploring online payment methods or set up a merchant account. Both are pain-free ways for consumers to buy your products all around the world.
Merchant Services & Credit Cards
Letting your customers pay with their credit card on your website is the most basic way to accept online payments. Choosing a dedicated merchant account or using an intermediary holding account are the best options.
Choosing one method over the other involves different business processes and funding times. Do your research and determine what best fits your business.
You will have to accept Visa, MasterCard and other types of credit cards. Remember that the merchant account service provider is a middleman between your business and the customer. They will process payments, debit the money from the customer’s card and deposit it into your business account. The equipment you need varies from provider to provider.
Besides processing transactions, merchant services provide valuable reporting for inventory management. Business owners can use data to identify sales trends, optimize product offerings, anticipate demand and plan for variations in the business cycle. Effective inventory management pays off with lower inventory carrying costs, maximizing unit sales and margins.
Systems are essential for many types of businesses – those with high or low volume of transactions, high-ticket sales or lesser amounts. Any business that has customer interaction or takes customer payments is a potential user.
Point-of-sale (POS) systems commonly are seen in restaurants, retail stores, lawn care, chiropractors and trucking companies. Niche businesses also benefit such as pest control, roofers, gardeners and landscapers.
A startup business often will process payments with an entry-level system like Square, which uses Bluetooth technology to accept credit card payments with a mobile phone. However, as business expands and sales grow, they need a more robust, secure and full-featured merchant services system such as that offered by Fitech.
Other Payment Options For Customers
With so much business conducted online and through eCommerce, it’s important for your business to accept online payments.
Today, still one of the most popular ways to accept payments is through direct debit of a bank account with an electronic check through ACH payment options. This allows your customer to input the information from their paper check into an online payment form. This method processes the payment electronically without a paper check.
ACH processes are governed by the National Automated Clearing House Association, with different transaction fees than credit cards. ACH also is more secure and predictable than waiting for a check to come in the mail, making it one of the better online payment options for small businesses.
Another popular method for customers to pay for predictable monthly services – like gyms and daycare – is to use a recurring billing system. This option is not only convenient for customers, but it guarantees that you will be paid on time.
For businesses that are mobile, credit card processes allow you to accept payments anywhere from your phone or tablet. The processing and fee structure is very similar to a traditional merchant service provider.
How Autobooks Can Help
Options for accepting payments online are continually changing. Learn all you can about the pros and cons of each method, as well as related costs and fees.
Stearns Bank offers Autobooks with its StearnsConnect online and mobile banking platform. The subscription service makes it easy for business account holders to send professional invoices and offer convenient online payment options. Autobooks helps you get paid faster and track customer payments to your StearnsBank account.
Please refer to the Autobooks website for its statement on security and compliance.
Contact Stearns Bank to get started!