Regardless of what it sells, every online business has the same goal – getting the customer to make a purchase. Often, the product quality or the prestige of a brand converts leads. However, customers often open their wallets because you made paying for stuff convenient for them. In other words, providing quick and secure payment methods could help you attract more sales.
This article looks at the primary payment methods you should consider. There are peer-to-peer (P2P) apps, such as Paxum, that function as an e-wallet that can be used to remit money instantly. We will cover that one, too, although you should already use it if you wish to take your business to the next level.
Without further ado, here are the payment methods you should pay attention to!
- Bank-Overseen Payments
Most online business transactions require bank involvement. It is the traditional way of performing capital transfers between two entities with the overseeing of a third party. This method ensures that the transaction occurs as planned without the receiver or the sender defrauding the other.
The main benefit of allowing banks to oversee your transactions is the low risk of losing your funds. Even if an improbable error occurs, you still have the authority to refer to and solve the situation.
On the other hand, bank-conducted payments are seldom tax-free. In fact, you will have to pay a commission for almost any money transfer you make or receive through a bank. After all, the third party requires its share to ensure transaction security. Unfortunately, these fees could often amount to financially cripple small businesses, entrepreneurs, startups, and others.
- Cash on Delivery (COD)
Suppose you sell products online with same-city delivery or customer pick-up. In that case, you can opt for cash on delivery as a payment method. This means that you trust the buyer to pay for the goods upon delivery. Some companies employ this method to build trust with their clients.
The main benefit of COD is that it helps you use more cash through your business. This process reduces bank fees and provides you with much-needed liquidity.
The downside of using COD is that some customers may escape or refuse payment. Others may return the products to the sender. This means that you may lose money on courier taxes and shipping costs.
- Electronic and Wire Payments
Electronic payment systems provide all the benefits of the above methods with lower risks and even taxes. Online payment processors don’t necessarily have to involve a bank to ensure the security and completion of a money transfer. Therefore, the sender and receiver don’t have to waste more money on commissions and transaction fees.
Many businesses have started using this payment method exclusively. For startups, especially, a financial lifeline helps them build a budget during their early development stages. Furthermore, they can save money on courier fees and shipping costs.
The evolution of electronic payment systems can replace traditional payment methods and save everyone more money and time.