How to Expand Your Customers' Payment Options Without Breaking the Bank

Plastic is quickly becoming the preferred currency, but while it's convenient for shoppers around the globe, it's not as cost efficient for business owners. They need special bank accounts in order to accept electronic payments, and the initial investment in credit card kiosks and other fees can make it prohibitively expensive for smaller operations. Worse still, it may soon be necessary to upgrade that equipment in order to keep up with technology that will allow people to charge items to their cards through smartphones. Money is becoming woven into the online world, and business owners need to find ways to prepare for it without breaking the bank.

Merchant Accounts

There's no getting around it; merchant accounts are a must for business owners. They're becoming less necessary thanks to companies like PayPal, but anyone who offers services offline in any capacity needs a merchant account in order to accommodate consumers.

Picking the right account is a very complicated affair. There's more variation within that segment of the market than there is with nearly any other financial product. There are monthly service fees, transaction fees, monthly quotas and a host of other things that each company handles in its own unique way. Some of the key questions that need to be asked are:

• How does a company handle credit fraud?
• How does a company handle charge backs?
• If there is a dispute, what will be done to protect the account holder?
• How big are the transaction fees?
• Do a certain number of transactions need to take place each month, and do those transactions have to add up to a certain amount?

There are far more things that need to be considered; new business owners should take their time and do a lot of research before coming to a decision. There are excellent deals to be had, but it takes some digging to find them. It's crucial to learn about interchange-plus pricing.

Saving Money on Hardware

Once a merchant account has been established, a business owner will want to purchase a credit card terminal. This normally runs a few hundred dollars, but the cost can be almost be eliminated with a smartphone and a subscription service. Companies like Square offer business owners the ability to turn their smartphones into portable credit card terminals through the use of inexpensive dongles. This can lead to huge savings for small business owners, and it likely reflects what even large corporate chains will do down the road. Someone who goes this route is ahead of the curve, and his business will only benefit for it.

E-Commerce Alternatives

Everyone knows about PayPal. It's partnered with eBay, and it's been a favorite for electronically transferring funds for around a decade. It provides an inexpensive way for someone to start an online business, and while it's not an ideal long-term solution for businesses that operate exclusively on the Web, it's perfect for anyone that can't raise large amounts of capital.

PayPal also offers a way to expand payment options through its mobile app. Smartphone users can do everything on their phone that they could do at a laptop or a desktop, and it offers additional features like the ability to make purchases on Amazon. Any business owner with a smartphone should not be caught without it.

Future Tech

While cellphones that can serve as credit cards are still a long way from becoming commonplace, the first steps have already been taken in that direction. This is something that a new business owner should keep in mind. If he invests in a credit card terminal right now, he may have to replace it just a short time later. He stands to save a lot by either utilizing a smartphone during the technological transition or by using smartphone exclusively in the present day and in the future.

The Ideal Solution is Tailored to Individual Needs

No two businesses are exactly alike, and it takes a wide variety of tools to keep costs down. The most important thing is finding a good deal on a merchant account, but aside from that, leveraging PayPal and smartphones is the surest way to cut down on fees and maximize profits. Technology has already given business owners everything they need to become more prosperous than ever. They just need to use the tools available to them.

Amy Nielson is a freelance blogger writing for Merchant Maverick. You can follow her on Twitter @Nielson_Amy.