There have never been more payment options available than there are today. Credit cards, debit cards, ACH, money orders, PayPal, Stripe, Square, Bitcoin—we could go on and on, but you get the picture. And with each having its own fees, rules, and processing times—it’s easy for business owners to become overwhelmed by it all.
Making sense of different payment options may be headache-inducing, but the question is—is incorporating more payment options into your business worth this (100% exaggerated) headache?
Here are four reasons why the answer is yes.
Reason #1: More Payment Options Equals Better Customer Experience
Here’s a scenario. It’s the end of the month, and you’re stuck with ‘admin duty’—processing and paying invoices from your suppliers and contractors. Yes, it’s a necessary part of business, but it can also be tedious and mind-numbing work. You just want to get it over with.
Soon, you come across a couple invoices requesting you kindly pay them by check—no other payment options are provided. All that extra work! You can feel your annoyance at these suppliers rising and make a mental note to see if you can find more flexible replacements, just to spare yourself the additional tedium.
Fortunately, the next few invoices are all much more accommodating, letting you choose between check, credit card, PayPal and even ACH payment methods. Sighing in relief, you quickly make the payments. You also make another mental note to keep using these suppliers.
Hypothetical? Yes. Fictional? Far from it.
The psychological research is clear. Up to a certain point, people like having more options, especially when it comes to parting with their hard-earned money. And by giving your customers more payment options, you are also giving yourself a higher chance of customer retention—which is extremely valuable to businesses (research shows even a 5% increase can lead to a 25% increase in profits).
To be frank, creating a better customer experience—attracting new customers and increasing retention—should be reason enough to expand the types of payment methods your business accepts. But if you’re still not convinced, here are a few more.
Reason #2: More Payment Options Expand Your Geographic Coverage
Sure, having only American customers may be more than enough for your business (perhaps they’re all even willing to pay you by check!). But if you have more international aspirations, then it’s time to seriously consider expanding your payment options to expand your geographic coverage.
This is obvious—you’ll be hard-pressed to find any business outside the US that will be willing to pay you by check. It also doesn’t make sense for you because of the transit time plus the chance that it gets lost on the way. If you want to reach international customers, then accepting credit card payments is the absolute minimum. For an even better chance, consider adding something like PayPal or Stripe.
Reason #3: More Payment Options Allows for More Innovative Business Models
The diversity you get from offering more payment option—different payment mechanisms and processing times—is often viewed as a downside. But there is another way to look at it—this diversity can also allow for different business models, which may be a positive for your business.
The ACH payment method—which allows businesses to receive payments directly from a customer bank account—is the perfect example. This is a great payment method for subscription-based business models, as ACH payments allow automatic recurring transfers with no required customer action after initial setup. As a plus, fees are far lower than credit cards, which can add up fast.
Reason #4: More Payment Options Makes Your Business More Resilient
As we said, managing multiple payment options can be a bit of a hassle, especially given the varying fee structures. And if one or two payment options are responsible for most of your revenue, it can be tempting to just axe the rest.
Having multiple payment options can seem redundant, but there is a value to redundancy few businesses consider—resiliency.
Consider this: Tasking one person with handling a vital day-to-day operational aspect of your business may be efficient, but it’s hardly resilient. What happens if they get sick? A two-person team doing the same job, on the other hand, may seem redundant, but it’s much more resilient.
The same concept applies to your payment options. What if one of your favorite payment processors decides to raise their fees by 1%? In a low-margin business, this could result in a serious blow to your bottom line. And if there are no ‘redundant’ backups in place, you’re forced to scramble for alternatives—which can result in payment disruption and customer dissatisfaction.
Of course, there is a balance to be struck between redundancy and efficiency. But if you’re only relying on one or two payment processors, you could be sacrificing resiliency—and the long-term success of your business.
Biller Genie Allows Flexible Payment Options
Here at Biller Genie, we pride ourselves on being one of the most advanced automated billing platforms in the market. We make it easy and convenient for your customers to pay invoices with flexible payment solutions including ACH and credit cards. With us, you can focus on what matters—running your business.