Payment patterns, in general, are a range of ever-developing phenomena. The way people pay for things varies depending on where they are, it develops with the latest technologies, it can be based on security or efficiency, and there is still a large component of personal preference in how each person pays for something. That said, it is worth sketching out some of the most crucial factors in recent times that have shaped the way we pay for things.
Covid deserves a mention. One of the effects of the pandemic has been a gradual shift away from money to plastic when it comes to payment. To take a well-known international example, Germany (a country previously well known for preferring cash to card payments) has in the last couple of years seen card payments overtake cash payments in prevalence. We might contrast this with the UK, where card payments have been standard for much longer and contactless payments of up to £100 mean that physical retail nearly always ends in a swipe of the card rather than a handover of hard cash.
Regardless of the fairly complex and varying nature of popular payment preferences, the general wisdom these days is that accepting card payments is pretty much necessary for business. For one thing, all eCommerce sites need to accept this form of payment, and the vast majority of brick-and-mortar outlets are following suit. fastFACTR, an invoice factoring for small business service, says that the general efficiency of card payments can also cause fewer cash flow problems for businesses.
Nevertheless, the acceptance, specifically of credit cards, is the one frontier that the smallest businesses have yet to cross. As it happens, it is wiser to cross it sooner rather than later.
Credit Card Payments
Unlike debit cards, which derive money from a personal bank account, credit card payments involve, technically speaking, the promise of the credit card provider to pay you after the purchase has been made. This means that the digital infrastructure needed for these payments is a bit more complex and can be an investment that is only made further down the line of company growth. This need not, however, be the case.
To accept credit card payments, you need to choose a credit card payment service provider. This can be a bit of a complex task, but there are several things to consider.
Getting Ready for Credit Cards
The first thing you need to think about before investing in the infrastructure needed to accept credit cards is the cost. It is important to remember that you can always update the system later to deal with things like multiple payment channels and so on.
The first thing is to consider the physical equipment that you will require if you run a physical outlet. Card payments can take the form of scanning the card itself, the input of details at a terminal, or even scanning things like the customer’s phone or smartwatch. You should investigate the costs of implementing each of these while considering how much you actually need each one.
You also need to decide on the type of payment processor you use. There are distinct ones that allow for personal use card reading (which can be sufficient for the smallest businesses) as well as those for small monthly payments and aggregators, which are designed for multiple merchants signing on the same account. This means fewer fees to be paid through less control over the system. Nevertheless, merchant aggregators are useful for smaller businesses.
There is no getting around the rise of payment by plastic – and it isn’t finished yet.