As a business owner, it is important to look for ways to maximize your revenue stream and reduce your expenses. One way of doing this is by looking into alternative payment options. You may be familiar with the terms ‘stripe’ and ‘paypal’, but have you considered other payment platforms? There are numerous reasons why you might want to explore other payment methods.
Accepting Online Payments
The most obvious reason for exploring online payment options is that you can readily accept online payments. You can set-up a merchant account with most credit cards and then begin accepting online payments within minutes. There is no need to process transactions manually or via fax or mail. It is easy to get started and the costs are minimal. You will need to register your merchant account with your local bank and then set-up your business online with a secure payment platform such as Stripe or Shopify.
The Downsides Of Traditional Payment Methods
There are, however, some significant drawbacks associated with traditional payment methods. For example, processing credit cards manually is extremely time-consuming. Also, depending on the size of your business, it could take several days to a week for the money to clear. Depending on the type of business, you may also be liable for certain credit card fees (i.e. transactions over $1000).
More Incentive To Spend
With traditional payment methods, there is typically no incentive to spend money. With credit cards, you are charged fees and interest for every purchase. If you are using prepaid cards, you will need to make additional charges to your business account before you can use them. Additionally, credit cards can be unreliable in the sense that they can be canceled at any time. That being said, there is also no risk of chargeback since credit cards are legally binding contracts.
Online Payment Providers
To reduce your expenses and increase your revenue stream, you may want to explore online payment providers. Just like with traditional payment methods, online payment providers such as PayPal and Stripe provide you with a way to collect payments online. Unlike traditional payment methods, these platforms also offer you the ability to issue refunds to your customers if they are not happy with their purchase. Additionally, with online payment providers, you can readily accept payments from customers all over the world. This is in part due to the fact that they have incorporated international payment options into their design. This makes it easier for customers to pay you globally. When accepting online payments, you will also incur fees similar to those associated with credit cards.
Most businesses, whether small or large, could benefit from some level of flexibility. If you are looking for ways to reduce operating costs and increase your revenues, you may want to consider exploring online payment flexibility. It is possible to have a store that qualifies for PayPal or Stripe’s flexible payment option. With these types of stores, you can accept payments at any time. There are no minimum purchase amounts and you are not restricted to certain credit cards.
The Downsides Of Cash On Delivery
Perhaps one of the biggest disadvantages of accepting cash on delivery is that it is extremely vulnerable to fraud. This is especially troublesome if you are accepting payments from customers you do not know personally. Depending on the purchase amount, you may also need to register with your local bank as a “cash handling business’. That being said, this could be a viable option if you are running a small shop or if the purchase amounts are not high. Not only do you have to worry about potential counterfeiters but you must also factor in the possibility of losing a lot of money in the process. Remember, you are essentially storing someone else’s money so there is always the chance that someone could walk off with your deposit without giving you your purchase. This is why it is best to use a payment platform that offers the option of accepting online payments or cash on delivery.
Since you will not need to collect the cash yourself and you will not need to worry about keeping a large amount of cash on hand, it is evident that there is less overhead involved in operating a cash on delivery business than there is in a traditional store. This could be a significant savings if you are paying for rent, utilities, and security. Most importantly, with cash on delivery, you do not need to worry about paying employees or providing benefits to employees. This type of setup is especially beneficial for small businesses that cannot afford the additional costs associated with traditional workplaces.
In the same way that you could use cash on delivery to reduce your overhead, you could also use the same service to increase your sales. Rather than collecting payments manually or via fax or mail, you can accept online payments and use the money to purchase products. You can use this method to create a store that offers a wide variety of goods and services, rather than just what you are offering directly.
As a business owner, it is your responsibility to ensure that you are collecting payments that are legally binding and to file the proper paperwork with your local authorities if you are selling goods or products that are prohibited for sale to minors or those under state-issued restraining orders. In most cases, you are required to collect sales tax for online purchases as well. Just remember, the laws regarding online payments and sales tax are constantly changing so make sure that you are aware of any new policies and ensure that you are abiding by the laws that apply to you.