Small business payment system
What is a payment system for small businesses?
If you’re running a small business, you’ve probably thought about integrating an online payment system to accept multiple payment methods. Cash and paper checks are gradually losing their relevance and being replaced by digital payment methods, including e-wallets, NFC-based solutions, and cryptocurrency. Proven fact: сompanies that accept online payment methods are significantly increasing their competitive strength in the e-commerce market. This is especially true for small businesses where competition can be extremely high.
The payment system for small businesses represents a set of payment tools and services that allow business owners to accept, process and manage different types of payments from their customers. Usually, to receive these services, a merchant enters into a contract with a third-party payment provider that supplies the merchant with software and hardware to process payments online. In addition to the POS system, the payment processor provides their clients with a secure payment gateway for transferring data between all credit card processing participants, and a merchant account.
Who is involved in payment processing
Payment processing can be described as the path that each transaction takes from point A to point B. At first glance, this process seems easy and fast, but the technical side is much more complicated than we think. Let’s take a look at how an online card processing looks like from start to finish.
- A customer enters their credit card details on a checkout page.
- A payment gateway sends an authorisation request to the acquiring bank. It also sends another request to the card network serving the cardholder (Visa, Mastercard, or other).
- The card network authorises the payment and sends a confirmation to the acquirer, informing it of the amount to be debited from the customer's account.
- The issuer checks the customer’s balance and sends the confirmation back to the network.
- The network sends the approval to the acquirer and gateway.
- The funds are debited from the customer's account and credited to the merchant's account.
What types of online payment should you process as a small business?
As a small business, you are looking to help customers make payments and receive the funds as quickly as possible. There are many online payment options available that can help you process secure, fast payments with minimal effort on your part.
Here are five common types of online payments for small merchants:
- Credit card processing. You can use a merchant account to process credit card transactions, which is ideal if you have a physical store. Credit cards are easy to use, offer fraud protection, and come with a variety of benefits like rewards programs and price discounts.
- PayPal. PayPal is one of the most popular payment methods for e-commerce sites because it's easy to integrate into an existing website or mobile app. It's also widely accepted by customers because it works with almost all major credit card companies and banks worldwide.
- Digital wallets such as Apple Pay, Samsung Pay, and Google Pay. Mobile wallet services allow users to make purchases using their smartphones at any location that accepts credit cards — even if that location doesn't accept mobile payments at all. Most major banks support mobile wallets, so they're easy to set up on your website or mobile app.
- Bitcoin and other cryptocurrencies. Cryptocurrency works like cash but isn't backed by any government or bank — meaning it's not regulated by any central authority or legal entity.
- Bank transfers (ACH). Accepting bank transfers may be a good option for small businesses. The ACH network offers cheaper funds transfers than checks or credit cards.
Cash, checks, and credit card processing are the bread and butter of small online businesses. But the world is becoming more and more digital, requiring merchants to adapt to the new reality and implement various online payment methods. You have a lot of options when it comes to online payment processing. The best way to choose is by considering your business model, industry, and customer base. Do some research beforehand so that you know what options are available and which payment system is cost-effective for you.
What online payment systems could I use for my business?
Payment processing for small businesses has become simpler and more affordable than ever before. Whether you run an online store, are trying to invoice clients or process payments at an event, there are options available to help you take payments online in the most convenient way possible.
You can use any of the best online payment systems such as Paypal, PayPal Pro, and Google Checkout, or sell your products in just a few clicks with Apple Pay or Android Pay. There are many payment platforms that allow customers to pay for goods and services using a debit card or pre-paid card, so this is a viable option when cash flow is an issue.
PayPal is a great option for small businesses that need a simple payment system and don't have the budget for online payment processing with all the bells and whistles. If you want more control over your website checkout process and the ability to accept payments in multiple currencies from around the world, then the Stripe payment system may be a better choice for you.
Online payment systems provide you with many features that will help you create a business that is efficient, reliable, and secure.
Small business payment processing software features
Whether you’re selling products, delivering food, or offering on-site services, you don’t want to miss any sales opportunities as a small merchant. To deal effectively and grow your business faster, you need a feature-rich payment system that supports multiple methods and provides maximum flexibility. While the main set of processing features is tailored to the particular needs of your business, there are always several universally applicable tools that are almost guaranteed to improve small businesses’ productivity and attract more customers.
A well-known fact is that e-commerce is exceptionally vulnerable to fraud. In the case of a small business, the loss of even one customer can negatively impact sales and income. With this in mind, integrate a payment system that has the highest level of data protection. PCI DSS compliance, fraud monitoring, and data encryption are essential for secure card processing.
Every small business knows how important it is to create a simple and easy user interface for its clients. To accept payments on-site, avoiding the risk of shopping cart abandonment, you need to integrate a payment platform that supports payment page customisation. The customisable payment page allows buyers to pay for a purchase without being redirected to third-party sites, ensuring a smooth and intuitive customer journey.
Running a small business is a continuous and laborious process that requires constant analysis and quick decisions. Things become much easier with management tools, allowing you to manage day-to-day operations, monitor the transactions flow, and track your customers’ payment preferences from one place. Plus, you’ll get reports and forecasts to track KPIs and analyse the competition.
Small business payment challenges
The main challenge for small businesses is the lack of experience and knowledge about how to set up an online payment system for the company. Many new business owners don’t realise that there are other options besides taking cash and checks at their counter. They may not know about the benefits of accepting credit cards or debit cards as payments from customers either because they don’t know where to start or because they don’t have time to learn about these topics themselves.
Small businesses are often cash-only because they're not big enough to justify the cost of accepting credit cards and digital payments. But that means you can't accept payments online, which is a huge disadvantage in today's digital world. Fortunately, there are several ways to accept credit card payments without breaking your bank account. We'll help you find the right payment system for small businesses that makes it simple to take payments online, in-store, and on mobile devices.
How to choose a payment system for small business
Once you’ve decided to accept credit cards, you’ll need to choose a payment gateway service. A payment gateway is a software that processes payments for merchants on their websites. The payment gateway usually takes care of all the technical details of accepting payments and transfers the money to your bank account.
Payment gateways are usually used by businesses with a physical location, such as a store or restaurant, but can also be used by online merchants. Some payment gateways specialise in e-commerce, while others are geared toward brick-and-mortar merchants.
To get a payment gateway and other payment services, you need to find a payment processor that works with small businesses. A payment processor is a company that directly manages your business account and helps you handle transactions. It provides the equipment and software to you and handles all of the back-end administration so you don't have to. Most payment processors also offer other value-added services, such as account management, reconciliations, and invoicing.
Here are some things to consider when choosing a credit card processor for your small business:
Security. The security of your customer’s financial information must be a top priority when choosing a payment gateway. A secure payment system is one that encrypts customer data during transmission and stores it in an encrypted format so no fraudster can access it. In addition to PCI (Payment Card Industry) compliance, pay attention to the security tools that a particular payment processor uses in daily work. Among them are tokenisation, SSL, penetration testing, and others.
User experience. Your customers should have an easy time with your payment system. A good user experience means providing clear instructions on how to pay online, including how much they will pay and where their money will go after they complete their purchase. A pleasant and intuitive payment page also matters a lot.
Multiple payment methods. An equally important factor when choosing a payment platform is the availability of those payment methods that are most popular in your location. The more options you integrate, the more likely customers are to make a purchase. For instance, at Corefy, we support more than 400 payment methods, enabling merchants to scale their businesses faster.
Pricing and fees. Before you conclude a contract with a payment processor, check and evaluate the pricing plans available and transaction fees. Look for a payment system that offers flexible pricing options so that you can keep costs down when times are good but scale up when necessary without paying too much. For small businesses with low transaction flow, Corefy’s Starter plan is a great solution. Here’s what we offer:
- Tools for optimised checkout flows
- Global payment capabilities with a single integration
- Comprehensive security and rigorous compliance
- Payouts using cards and alternative methods
- Financial reconciliations and reporting
Accepting payments for your small business is easier than you think. We offer a fast and secure payment system that helps you get paid quickly, so you can focus on what matters most: growing your business. Get a ready-made payment platform for accepting all types of online payments. Schedule a demo to see how it works!
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