There are so many to-dos on the list of an aspiring business owner. You’ve got to choose your business structure. Determine your marketing plan. Find capital to get started.
But have you given any thought to how you will accept payments from customers once you launch? This might not seem like an area you need to deal with before you start your business, but having a clear-cut plan will lay the foundation for smoother sailing once you start making money. After all, you’ll have plenty of other things to worry about!
Here are five things you should understand about accepting payments from customers:
1. The More Forms of Payment You Accept, the More You’ll Make
It’s baffling that more than half of small businesses do not accept credit cards as payment. After all, most of us don’t carry cash anymore, and customers prefer to pay with a card.
Before you decide that bothering with a merchant card processing account isn’t worth the hassle, consider how much more money you could make if you accepted credit and debit cards.
2. Technology Is Your Friend
Just a few years ago, technology didn’t play the role it now plays in accepting payments. But these days, customers come to expect that you accept payments on the go, using platforms like Square or Intuit GoPayment. If you’ve got a smartphone or a tablet, all you do is attach a card swiper and swipe. You’ll be charged a transaction fee, just like you would with a traditional card-reading machine.
Customers also expect to be able to pay online. Most accounting programs offer third-party services that allow you to process online payments from a client’s bank account or credit card. Not only do you make it easier for clients to pay you, but you also get paid faster.
3. Credit Card Processing Expenses Vary
When you do accept credit cards, you need to be aware of just what you’ll be paying for the privilege of accepting cards. These may include:
- Monthly fee: to use the service
- Transaction fee: flat rate or percentage charged for each transaction
- Interchange fee: percentage of the transaction the bank issuing the card takes for expenses
There are other fees you might incur as well, such as one if your transactions in a given month don’t meet the minimum required. Find out before you sign on with a merchant card processor exactly what fees are charged and when.