Why Should Small Businesses Use Online Payment Systems in 2022?

The little guys are not so little anymore. Most modern-day business owners start small but scale quickly, thanks to the potential unlocked by the internet. They grow much faster than conventional old-school businesses. However, most companies that want to scale fast and sustainably need to have solid payment systems from the beginning. With modern-day online payment systems for small businesses, merchants can start their financial journey on the right foot.

Adopting such systems is no longer just a perk but a necessity for businesses that want to grow their online sales quickly.

Benefits of Adopting Online Payment Systems for Small Businesses

Benefit #1: Accept Contactless Payments

The COVID pandemic has left people wary of making unnecessary physical contact. Over the last two years, we have seen nearly a million Americans die due to the virus. Such catastrophe increased the demand for contactless technology and eCommerce. Online payment solutions for small businesses helped merchants quickly get a hold of the situation and resume business without exposing themselves to the deadly virus.

With solutions like mobile payments, hosted payment portals, online ACH, and chip-based NFC cards, merchants provide the same quick and efficient service levels without the risk of exposure. Learn more about the benefits of adopting contactless payments.

Benefit #2: Reach Customers Across the Globe

Studies show that 17.8% of all retail sales were eCommerce sales in 2019.  Moreover, projections suggest that with a steady increase, this number will hit nearly 25% by 2025! This is proof that online shopping is here to stay and grow. Nowadays, business owners do not need high-tech web developers to create a website. Instead, they start their eCommerce journey with a few simple steps. Creating an Amazon seller, WooCommerce, or a Shopify account generally takes a few minutes.

The best part about selling online is that business owners easily reach a wider audience with a lower investment. With a robust website and reliable online payment solutions, they sell products online and receive money instantly. 

Benefit #3: Save Costly Processing Fees

With broader adoption, online payment technologies are getting cheaper and more efficient. Payment processing companies bend over backward to minimize their margins and offer their customers the best possible deal in a cut-throat environment. Most business owners save money on processing fees when they accept credit card payments in bulk over the internet.

Benefit #4: Eliminate the Need for Card Machines

Some modern-day businesses that are entirely cloud-based no longer need conventional payment processing tools like card machines. They process all their ACH and credit card payments online using a reliable payment gatewayFind out if you need card machines for your business.

Benefit #5: Accept Payments with Different Methods 

The top payment processors enable the business owners to help them collect payments via different payment technologies on a single platform. They help growing businesses collect ACH, credit card, and debit card payments on a unified portal.

Benefit #6: Reduce Wait Times and Offer Better Customer Service

The most advanced online payment solutions for small businesses are accessible through mobile apps. They operate on a self-serve model that requires minimal input from the merchant. The customers will use these online payment gateways to pay the exact due amount with a single click, thereby reducing wait times at the billing counter.

Benefit #7: Maintain PCI Compliance and Security

Increased security is one of the core reasons online payment gateways are gaining popularity so quickly. Recent developments in the Nacha and credit card networks have made paying via ACH and credit cards safer. Moreover, the top payment gateways go the extra mile to reduce fraud by implementing enhanced PCI compliance and security measures.

Benefit #8: Reduce Chances of Chargebacks

Intelligent online payment gateways collect an extra level of authorization from the customers before approving payment. This authorization serves as critical evidence to settle financial disputes and prevent fraudulent chargebacks.

Benefit #9: Automate Accounting and Reconciliation

Modern-day credit card and ACH payment solutions do much more than accept payments. They also integrate with critical back-office accounting solutions to automate data entry and reconciliation tasks on the merchant’s bank account. These solutions also help the business owner automatically send invoices using email invoicing solutions.

Benefit #10: Automate Payment Reminders

Some complementary technologies like SMS payments coupled with ACH solutions help merchants maintain active communication with the end consumers. These technologies will automatically send payment reminders to the customers via SMS text. Also, these texts contain a payment link that redirects the customers to pay online using their preferred payment method. 

Benefit #11: Accept Instant Payments

Online payments are almost always instantaneous. Unlike checks that need to be deposited at a bank branch before the merchant can use the money, online payments let them access funds immediately. Modern payment services are complemented by SMS texts that immediately notify the customer and the merchant of completed payment. Banks also send a notification for a failed payment instantly so that the customer can try paying again.

Benefit #12: Set Up Recurring Payments for Subscription Plans

Online payment solutions with ACH technology support recurring billing. Merchants leverage this recurring billing platform with email invoicing to bill their repeat customers automatically. Merchants that exclusively deal with repeat clients, as in the IT service industry, leverage this to repeat transactions automatically, thereby saving countless hours every week. Merchants that provide their services/products as a monthly service like energy, water, groceries, etc., also use this to charge their customers a different monthly fee based on their service utilization every time, using automation.

Benefit #13: Low Set-Up Costs

Small businesses can get started with online payment solutions without high upfront costs. The best payment processors offer a transparent pricing model from day one. Since online payment solutions rarely require a hardware component, merchants save massive upfront investment costs. Some payment gateway providers also offer hosted payment pages to further reduce the upfront cost required for web development and server management.

Benefit #14: Offer Cash Discount 

The cash discount program is one of the primary reasons for the growing favorability of ACH payments. Customers can pay with cash in a conventional store to save money on the credit card processing fees. However, merchants that do not have a traditional offline store do not have an option to collect in-person payments via cash. Therefore, the customers stand a chance to lose out on a cash discount opportunity here.

Instead of collecting cash, merchants who offer the ACH payment options can still offer their customers a cash discount. A well-implemented cash discount program supported by a reliable payment platform that accepts ACH payments eliminates costly transaction fee and attract more customers.

Benefit #15: Lower Theft Risks

Most business owners prefer keeping limited cash on hand at their offline store locations to prevent the risk of robbery. Online payment services eliminate the need for cash, thereby reducing the risk of theft. Merchants that accept online and card payments will afford to keep little money at their stores to handle change for cash transactions. 


Where Can I Get Started? – Choosing the Right Payments Processor

Step 1: Choose the Right Payments Processor

Choosing a suitable payment processor is step one in the online payments journey for most business owners. Without a safe way to carry out online transactions, the business owners have no way to provide services/products and collect due payment. The best payment processors help the business owners set up their merchant accounts and hosted payment pages to start accepting online payments.

Step 2: Understand Pricing Model

New business owners should ideally spend enough time understanding the pricing models for processing fees before finalizing a partnership with a payment processor. The most reliable partners offer completely transparent partnership terms and an easy-to-understand fee model for merchants to start. If you feel the partner is needlessly complicating the pricing model or has hidden fees, you should look for other options in the market.

Step 3: Adopt Complimentary Payment Technologies

Adopting complementary payment technologies like SMS payments, Email invoicing, IVR payments, Recurring billing, etc., helps you scale your business seamlessly. Even if you do not want to adopt these technologies right away, having an option to integrate with them in the future with the same partner is a significant advantage. 

Step 4: Start Accepting Payments

Once you have compared the pricing plans and technologies for a few payment processors, it is time to start accepting online payments!

Choosing the right payment processor for your business from day one can make or break your business. With the proper support, you can expect near-perfect uptime and low processing costs. Most reliable payment processors offer favorable terms to growing business owners who handle a sizeable monthly transaction volume. Request a callback from a financial expert if you want to know more about the world of payment processing.


Date originally published: April 24, 2022

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