Getting paid. From the one-person shop to the largest corporations, it’s the end goal of every business. How the payment process happens has taken many forms over the years, and this evolution shows no signs of stopping.
According to a recent Mintel study on payment methods – and consumer attitudes about them – the trends continue to shift. Here’s what your small business needs to know to stay ahead of the curve.
Consumers like easy, and to a majority of them this means using a credit, debit or gift card at the point of sale. In fact, according to a Forbes online report, 66% of all point-of-sale transactions are made with plastic. Despite this compelling evidence, 55% of the nation’s 27 million small businesses still don’t accept cards.
If your business is one of them, you’re missing out. And while most small businesses cite fees as the primary reason for not honoring plastic, the upside of increased sales typically outweighs the cost. An article by Business News Daily does an excellent job of explaining fees and other issues a small business should consider when adding cards as a means of payment.
For merchants on the move, such as trade show exhibitors and food trucks, devices such as Square make accepting plastic easy. By affixing a small device to your mobile device or tablet, Square enables it to process credit, debit and gift card payments.
Despite a heavy reliance on plastic, a growing number of merchants and consumers are delving into new payment methods that leverage technology. These include:
This secure online payment method allows individuals and businesses to exchange funds electronically. By far the most established alternative method, PayPal boasts over 100 million active accounts in more than 190 markets worldwide. Merchants can set up a basic account with no monthly fee or upgrade to a more robust platform for $30 per month. To learn more or get started visit paypal.com.
Mobile Apps and Smart Phones
Frequently touted as the next big thing in payments, apps that turn your smartphone into a virtual wallet have yet to gain significant traction with the buying public. Apple Pay, which facilitates payment with an iPhone, is also in its infancy. While younger consumers are more inclined to pay using a smart phone, analysts predict that widespread adoption may take a while. For a glimpse of what the future might hold, check out this piece on Hongkiat.com on digital wallets.
What About Cash And Checks?
While the saying, “cash is king” still resonates, it’s more of a legal tender figurehead than the all-powerful currency it was decades ago. In fact, according to the Mintel study, only 17% of consumers find cash a convenient means of payment as opposed to 33% and 35% for debit and credit cards respectively. Paper checks fair even poorer than cash with a mere 6% convenience ranking. While cash and checks may be part of the payment scene for the foreseeable future, clearly the landscape is changing.
Consumers and merchants have been negotiating payments from the beginning of modern commerce. It’s a relationship that continues to evolve and those who change with it will make the most of it.