Payment MethodsYou’ve probably already figured out by now in order for your business to be successful, you need to be ready to accept various payment methods. As many as possible, in fact. Every customer has their own preferred method for paying for their groceries, clothing, toys, cars, services, etc. The most popular is, of course, credit or debit cards. But did you know there are over 3,000 different payment cards your customers may want to use in your store? And then there are all the “old schoolers” who like to pay with cash or check. Although credit and debit cards are the most common, people still love their cash! Something about having some green in your pocket just feels right, doesn’t it? I pay for most things with a credit card, but I always carry cash too. You just never know when you’ll need it and most people like to be prepared for the unexpected or spontaneous purchase. If you look at the history of “payments” you will find the oldest form of a payment system we know of is bartering. Bartering, at its core, is a system where goods and services are directly exchanged for other goods and services. Payment methods have obviously changed and evolved over the years into much easier and more efficient payment methods. Imagine if we were still using the barter system as our main method for conducting payments! How crazy would this be? Say you needed electrical work done in your home but didn’t know how to do it yourself. You’d have to go to Electrician Joe and offer to plow his field or paint the interior of his house just so you could use the lights in your home to find your way to the bathroom in the middle of the night! Madness! Thankfully we live in an age where you can simply pay someone to do the things you aren’t as skilled at doing yourself, and simultaneously carry on with your day-to-day life! Clearly credit cards aren’t going anywhere, and I dare say neither is cash. In fact a lot of millennials are opting not to open a credit card account and are going with what they deem less “dangerous” payment methods, like credit union debit cards. Debit cards don’t have annual fees or an APR attached to them. They also can stop the user from purchasing anything beyond their bank or credit union account balance. This helps them stay out of crushing debt they witnessed their parents dealing with their whole lives, and probably still are. The only problem with opting to go debit only is it doesn’t help them establish any credit in the marketplace. If they don’t establish a line of credit in good standing, when they go to make a large purchase they might run into some difficulties being approved. Nevertheless, debit cards are ever popular with many people simply because it has much more limiting restrictions on their would-be splurge shopping habits. Customers can’t just swipe and worry about paying later when they use their debit cards. The amount of their purchase is directly withdrawn from their bank or credit union account and is usually reflected immediately. Once it is gone, the shopping spree is over. Cash, being the King it is, will probably never go away either, even with stiff competition from its “charge it” payment method brethren. There are literally zero fees attached to using cash as payment. No annual fees, no maintenance fees, no APR, none of this. The cash in your pocket, whatever amount it is, gives you the exact sum of buying power. Nothing more or less. Some people (of the older generation especially) prefer to still use checks to pay for goods and services. They like balancing their checkbook and trust themselves over any other tracking method of spending used out there. It is still a handy way to keep written track of payments made to family or for home repairs, etc. which can’t be kept track of with plastic. It used to take a few days for checks to clear a bank account. No more. With advances in technology over the last several years, checks now typically clear within a day. You may have some customers who call to make a payment over the phone. These aren’t the safest method for accepting payments because the person is not present to verify their identity, but there are some safety measures you can use to ensure you are performing the transaction in the safest possible way. There are some benefits to this method. For example, with credit card payments over the phone, the conversation must be recorded by the accepting company. Not with checks. All a check-by-phone payment needs is the account holder’s authorization. But there must be copious notes taken during the transaction. Other benefits of check-by-phone include:
- a reduced number of chargebacks
- fewer regulations to complete the process
- no more “The Check is in the Mail”
- costs can be less than credit card transactions
- it supports non credit card customers
- and many others.