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Good afternoon, Community friends! Morgan here, back to share some more small business tips and tricks. I found an article posted in the QuickBooks Resource Center (you should check it out!) and it covered all the details for electronic payments. Now I don't know about you, but the more options to get paid - the merrier! Let's take a closer look...
Personally speaking, having cash on hand is a rare occurrence for me. Nowadays just about everything can be done electronically, especially paying for goods and services. "Electronic payments are when a customer pays for a product or service electronically, rather than exchanging physical cash or a paper check. Electronic payments are especially common for e-commerce retailers who complete online transactions and need their customers to pay online. However, businesses also use electronic payments in-person through debit card or credit card payments."
Now let's take a look at a couple of different kind of electronic payments:
- One-off payments: just like it sounds, this type of payment is a from a random purchase, such as a visit to a boutique or local coffee shop.
- Recurring payments: electronic payments are especially handy when it comes to recurring payments, which are payments that are on a repeat, regular schedule. The electronic route is perfect for recurring payments because they can be made automatically and you don't even have to stop what you're busy doing to worry about making the payment.
Electronic payments can be made with:
- Credit cards and debit cards
- Pro: It’s the most commonly used payment type, which means customers will expect it.
- Con: It has higher payment processing fees.
- eChecks
- Pro: It has lower fees than card payments or ACH transfers.
- Con: It’s not as familiar or as convenient to customers as card payments.
- ACH transfers
- Pro: Once the bank accounts are linked, payments are simple and convenient.
- Con: Many banks have limits on the amount you can send through an ACH transfer.
Last but not least, here are a few benefits of electronic payments:
- Greater convenience and efficiency: quick, easy, and convenient - can't go wrong with that description! Plus, that applies to both the business and customer. Win-win!
- Boosted revenue: As previously mentioned, there are a few processing fees to cover, but with the additional option of e-payments the amount of boosted revenue will certainly outweigh the small fees. "Many experts claim that people are willing to spend more when they pay with a credit card versus when they pay with cash."
- Improved customer relationships: "Requiring your customers to use a certain type of payment method can make them feel pigeonholed and lead to a negative customer experience." Definitely something you want to avoid! Customers want options, and when you present them with many options to pay you, you're creating a more positive experience for them. (And that's always good for you!)
If you're not currently accepting electronic payments maybe this article will change your mind. After all, it will be an easier more convenient method for both you and your customers. Check out the full linked article above for even more info. And before you go, did you know you can accept these types of payments we've discussed through your QuickBooks account? Just a little food for thought. Take care!
