Small business payment options: The Definitive Guide

Small business owners receive payments for the goods or services they provide. In some cases, that might mean cash in hand. In other situations, it could be an invoice for future services or even a payment from a customer when they are not present.

Small business owners need to find creative and diverse ways to get paid for their work. Depending on your circumstances and industry, you may have different options available to you with regards to how you get paid as a small business owner. Here is everything you need to know about getting paid as a small business owner.

Receiving Cash for Services Provided

If you want to get paid immediately and don’t want to worry about collecting an invoice, you can accept cash for the services you provide. If you’re a freelancer or a consultant, you might have to take this approach. If you run a service-based business, you may have to take cash only. In some industries, you must accept cash as payment. That means you might have to turn away customers who want to pay via methods like credit cards or online payment methods like PayPal. This will limit your client pool and may affect your ability to scale your business. Be aware that you will be exposing yourself to a degree of risk by accepting cash. Make sure you use discretion and common sense. If a client insists on paying in cash and has no legitimate reason for it, walk away.

Using a POS machine

For in-person payments, it's important that you get a POS system for small businesses that is secure enough to process every transaction and has the right software to help you handle your administrative tasks more efficiently. Your business type determines what sort of sales you make and what sort of assistance you require. A plumber, for example, wouldn't require the same features a fitness studio POS system has. It's crucial to choose the right POS system based on cost, security, PCI compliance, and user-friendliness. 

Invoicing: Getting Paid Via An Invoice

If you’re selling a product or offering services in a B2B environment, you’ll probably be issuing or receiving an invoice. An invoice is a written record of a business transaction that shows the price, the product or service being provided, and payment information. Most business-to-business (B2B) transactions are conducted via an invoice. With a B2B client, you might have to wait 30 or 60 days to get paid. Some B2B clients will pay immediately, but others may take advantage of the time between the invoice date and when the payment is due. Whereas cash is king for one-off transactions, an invoice is king for regular transactions. If you provide services to clients or if you sell products, you’ll likely receive payment via an invoice.

Virtual Terminal for phone payments

If your business accepts phone payments, you might be able to get paid immediately via a virtual terminal, sometimes referred to as an online payment terminal.

.A virtual terminal is an application that lets you accept a variety of payment methods, including phone payments. Virtual terminals let customers pay for goods and services over the phone by providing a credit card payment. 

A virtual terminal is not the same as a Secure Virtual Terminal. A virtual terminal will require the customer to read their card information out loud over the phone. Using a virtual terminal will also require your staff to take the payment to be in a ‘clean room’. Where they have no access to mobile phones or any device which can store or record data. This includes a paper and pen!

The alternative is a Secure Virtual Terminal. A Secure Virtual Terminal enables businesses to take payments over the phone securely. The customer, at the point of payment, can enter their private card information using their phone keypad. This means your business is never in possession of customer card data. If you don’t have it in the first place, you cannot be accused of losing it. A Secure Virtual Terminal takes over 90% of the responsibilities for PCI-DSS from your business. Saving you time and money in saved non-compliance fees. A Secure Virtual Terminal also gives you the option to customize the data you collect during a payment, giving your business customizable payment processing.

Payment links via email, SMS & chat

You can generate a payment link to be sent to a customer via email, SMS and chat. These services allow you to accept credit cards and other forms of payment and then immediately transfer the money to your bank account. These payment links and methods don’t replace the need for an invoice. You can use these payment links to get paid immediately for service. If you offer an ongoing subscription service, you can use one of these links to get paid each month.

Recurring payments

Customers make recurring payments to receive goods and services. Recurring payments can occur weekly or monthly, or on any schedule that works best for your business. Fixed and variable recurring payments are the two types of recurring payments. A magazine subscription or athletic club membership are examples of a fixed recurring payment, where the customer is charged the same amount every time. A variable recurring payment refers to a payment that changes from payment to payment, such as a utility bill. 

Recurring payments are available as part of a Secure Virtual Terminal for phone payments.

Bottom line

Ultimately, as a small business owner, it is up to you on what payment methods you will accept. The use of cash is increasingly on the decline, so making sure your business is prepared to accept card payments is important. Then choosing systems that actively help prevent fraudulent activity and that create a relationship of trust with your customers. The last thing to consider is if you have a need to take cardholder not present payments. Then you will need a solution like a Secure Virtual Terminal to ensure that payments are processed in compliance with PCI-DSS, GDPR and other data protection regulations.