Payment Acceptance: 5 Tips for Small Businesses to Succeed
If you’re a small business, there can be a lot of pressure to handle your payments correctly and efficiently, while keeping all data organized. That’s why it’s important to understand strategies that can help you streamline your overall process, and also find the best payment processor.
By streamlining your processes, you can not only improve your purchasing and payment processing system, but also increase customer satisfaction. It’s key to remember that your payment acceptance is connected to everything else at your business, and can directly impact your success.
In order to streamline your method of payment acceptance, try these strategies:
- Do your research.
- Think about your customers.
- Accept a variety of payment methods.
- Keep your data organized.
- Determine the costs.
Are you ready to take a dive into these tips and improve your payment process? Check out the strategies from your small business lender below!
1. Do Your Research
Before jumping into a payment processing system, it’s imperative that you do your research and determine where you currently stand in terms of accepting payments, and how you could further improve. Ask yourself these questions:
- How do we handle payments now? Do you use a merchant account or payment service provider (PSP)? A merchant account is an account that you can deposit funds into from completed credit/debit card transactions, while a PSP lets you process credit/debit card transactions without a merchant account.
- How much is our monthly processing volume? This can determine whether or not you use a merchant account or PSP, because depending on your volume of sales each month, one or the other may be the better investment. If your volume of sales is higher, for instance, a merchant account may be the more cost-effective way to go, but it still depends on the specific needs of your business.
- How does payment processing affect how we use our POS system? You can choose between a countertop credit card terminal and a POS system. Countertop terminals have the ability to process transactions, but there is not a lot of other functionality associated with them. Options such as iPad POS systems, however, can handle additional functions, such as inventory management, employee scheduling, and more.
Doing your research and understanding your business needs is the first step in figuring out how best to accept payments in the future. By asking yourself how you handle payments now, as well as considering your monthly processing volume and what kind of system to consider, you can begin the process of accepting payments in a more efficient method tailored to your business.
2. Think About Your Customers
An important factor to consider, of course, is the foundation of your business: your customers. Thinking about your customers is essential because their convenience and satisfaction is what keeps your business running. When evaluating your customers in terms of payment processing, remember the following:
- Focus on convenience. If you streamline your payment acceptance methods, this will make the overall experience more convenient for your customers. Avoid downtime and long lines by incorporating an effective and reliable POS system into your store.
- Consider the user experience. If your customers are also shopping online, it’s a good idea to make sure your user experience is straightforward and intuitive. Swoop offers a great explanation of shopping cart abandonment and ways to prevent it.
- Prioritize security. If your payment system were to encounter a data breach, this could be detrimental to your business. Ensure that you’re incorporating secure tools for both online and in-store payment processing, so that your customers’ information remains safe and well-protected.
In order to keep your business running smoothly, it’s important to factor in convenience, user experience, and security features when deciding on how to process payments. Without keeping your customer at the forefront of your business plan, it’s easy to run into roadblocks that can hurt your business.
You can also check out this piece on customer acquisition strategies and apply those strategies to your payment processing experience.
3. Accept a Variety of Payment Methods
Part of focusing on customer convenience involves making the actual payment an easy process. In order to do this, you should accept a variety of payment methods. By doing that, you increase your chance of sales because customers who come in without certain forms of tender on them can pay in other ways.
Here are some payment methods you should incorporate:
- Credit/debit cards. Of course, the most common method of accepting payments is via credit/debit cards. With these options, however, come some caveats. You should think about security and convenience, and that will include accepting EMV chips. Consider the options that accompany these forms of payments and incorporate them into your payment processing system.
- Contactless and mobile payments. Mobile pay has grown from simply including paying online and in-app purchases, to a mobile wallet system that allows for contactless payments, such as Apple Pay. Customers can hold their EMV-chipped credits cards or smartphones in front of a configured payment terminal, reducing the transaction time and keeping lines moving.
Enabling your customers to use different types of payment methods not only increases their level of satisfaction with each visit, but also keeps your lines running smoothly, which can help boost your sales. Even monitoring your cash flow can become more manageable and accurate if your employees have a streamlined and stress-free process to manage all payment types.
With rising technology for small businesses comes added convenience, but it’s important to also keep this data organized and tracked, which will be discussed in the next section.
4. Keep Your Data Organized
As you explore your payment processing options, think about how you can keep your data organized and what features you should integrate into your system. Without organized data or an efficient way to process reports, your system could become overly complicated and disrupt the workflow of your business.
There are a few factors you should look into when considering data in terms of payment processing. These include:
- Software integrations. A great method of accepting payments is through a POS system that allows you to integrate with other types of software. For instance, Lavu’s POS system for restaurants allows you to integrate with accounting software, payment processors, digital menu boards, and others.
- Analytics reporting. Look for a system that offers analytics reporting. You can use this feature to check sales reports, create schedules, check inventory, and export a variety of other reports. By streamlining your reporting process, the workflow of your business will naturally become more manageable.
Keeping your data organized is essential to running a successful business. Without a firm grip on your reporting of sales, inventory, scheduling, etc., it’s easy to spend more time on these tasks and pay less attention to other aspects of your business that require your focus. By using a POS system that allows you to integrate with software you’re already using, you’ll be on your way to simplifying your entire process.
5. Determine The Costs
Of course, the type of payment processor you choose will depend a lot on the cost. On a larger scale, think about what your business needs are, how large your business is, and what your sales volume averages to. On a smaller scale, you should consider the processing fees involved. These include:
- In-house processing fees. POS systems charge you either a monthly usage fee or a credit card processing fee that makes up for not having a monthly fee.
- Merchant account processing fees. If you already have a merchant account set up and want to continue using it with your POS system, this fee will depend on the merchant account’s processing fees.
- Credit card fees. Think about how your POS system will deal with payment processing fees. For instance, some providers may require a flat-rate fee or a tiered fee.
In addition to this, the pricing plan of your payment processor will adjust based on your sales volume. As a result, depending on your average sales each month, you will probably go for a particular type of pricing plan. Ask yourself:
- Will my business grow in the future? If this is the case, you might want to consider a scalable POS system to use for your business. A scalable solution will adjust with your sales and make it affordable to stay with your system.
- What features do I need? Do you need to manage reports, inventory, and employee scheduling in addition to sales? If so, look into a payment processing system that offers or integrates with the features you need and narrow down your search so that you don’t overpay for features you don’t require.
Be sure to look into the fee types for each POS system to determine what costs you will incur with your sales volume as time goes on. Make a list of the features that will best adhere to the needs of your business so that your software search is more efficient and relevant.
Following these strategies is key to correctly handling payment processing. Be knowledgeable about what systems you need and pay for, as well as how you use them. If you determine what you require and keep your customers in mind throughout the process, you’ll be on your way to successfully accepting payments and keeping everyone happy.
Saleem Khatri is the Chief Executive Officer of Lavu. Saleem has a “founders mentality”, with a track record of working with high-growth software companies. He is a rare breed of someone who is both a hands-on leader and a strategic visionary and brings with him a myriad of inspiration, technical acumen, and a passion for our products, services, and customers. Prior to Lavu, Saleem successfully launched software and hardware products at start-ups via Y Combinator and managed a $79 billion investment portfolio on behalf of the United States Department of the Treasury. Saleem earned his MBA from the Harvard Business School and his undergraduate degree from the University of Michigan — Ann Arbor.