Best Payment Methods for Small Businesses

The checkout page for your small business should be intuitive and smooth, no matter what services you’re offering. But with so many payment methods available on the market, how can you know which one is the right choice?

We’ve done the heavy lifting for you and found the best payment methods for small businesses. On top of that, our blog will cover top payment providers as well as factors you should consider during the decision-making process. Stay tuned!

Popular payment methods for small businesses

Here are the 6 best payment methods for small businesses, ensuring convenience and ease of use for your customers. 

1. Card payments

Credit cards are the most common and universally accepted payment method. They provide fast transaction speeds and strong security features against fraud. So, if you haven’t implemented cards as a payment option yet, you could be losing customers. That said, card payments also come with high processing fees, chargebacks as well as ongoing costs for maintaining point-of-sale (POS) terminals.

2. Online payment gateways

Online payment gateways enable you to accept payments directly from your website. They typically accept different payment methods, like credit/debit cards or digital wallets, ensuring wider reach. With many online payment gateways available like PayPal and Stripe, it’s important to research each pricing structure and the type of payment options accepted. Keep in mind that the integration process might be difficult and could require IT know-how. 

3. Bank transfers

Bank transfers are a great payment method for large and recurring transactions. This is because they offer low fees; the downside is that it takes a few days to process the payments. Examples of bank transfers include Automated Clearing House (ACH) in the US, Single Euro Payments Area (SEPA) Direct Debits in Europe, and Wire transfers. The latter is beneficial for large, one-time transactions that need to be processed immediately. 

4. Digital wallets

Making purchases on the go has become extremely popular, as customers just need to make a tap on their phone. Digital wallets like Google Pay and Apple Pay allow for a contactless payment method which doesn’t require customers to input their card info for each purchase. Plus, they use tokenisation and biometric authentication for secure transactions. However, you’ll need to have a near-field communication (NFC) terminal to process payments made via digital wallets.

5. Cryptocurrencies

Offering cryptocurrencies as a payment method can attract customers who want more privacy and are tech-savvy. Similar to bank transfers, they have low transaction fees, but there’s no chargeback. Moreover, note that the value of cryptocurrencies is subject to frequent changes, and they involve complex tax regulations. All of this can negatively impact transactions.

6. Invoices

If you’re providing services to a company or want to make B2B transactions, sending an invoice is an excellent way to collect your money. You can include details on how the invoice should be paid — whether that’s a link that redirects to a payment page or a payment gateway. Since this requires manual action from the client’s end, there could be some delays in the payment process.

Take a look at Native Teams’ client invoicing feature

Best payment providers for small businesses

This section will dive deeper into the best payment providers for small businesses, detailing their features, pricing structures, and security features. 

Native Teams

Native Teams is an all-in-one work payments platform offering solutions to simplify small businesses' payment process. It has a client invoicing tool for generating invoices for local and international clients without a company setup. You can also send instant or scheduled payment requests globally, send and receive payments in multiple currencies, and access funds with a Native Teams card. 

Moreover, Native Teams also allows Stripe integration through their service for a legal entity setup in the UK. This is beneficial for e-commerce businesses that want to offer flexibility for their customers as well as reach broader markets.

All sensitive data is encrypted, and the platform runs on Amazon Web Services, the leading 'cloud computing' infrastructure. Plus, it adheres to Anti-Laundering policies, ensuring full compliance with global AML standards and regulations.

It’s also worth mentioning that Native Teams has one of the lowest fees on the market, so the payments that you receive or send will be in their full amount. Regarding pricing, their Contractor plan starts at €19 per month per contractor and has all the necessary payment tools.

Learn more about Native Teams’ payment solutions and how to use them

Stripe

Stripe is an excellent choice for small businesses, as it easily integrates with e-commerce platforms and POS systems through APIs or plug-and-play options. This payment processor supports all major cards, digital wallets like Apple Pay and Google Pay, and international payments in 135 currencies.

You don’t have to worry about payment security with Stripe — the platform uses end-to-end encryption (TLS) to protect data and follows the highest security standards for credit card transactions.

It’s great that Stripe doesn’t require setup costs or monthly fees. That said, there are transaction fees: for online payments, there’s a 2.9% + 30 cents fee per transaction, while for in-house payments, 2.6% + 10 cents per transaction.

PayPal

PayPal is suitable for businesses prioritising a seamless checkout process across multiple channels with minimal technical overhead. The platform offers tools for managing recurring billing and allows batch payments in multiple currencies. Plus, there’s an option to schedule transactions, which is very convenient. 

In addition, PayPal ensures secure data storage through encryption and maintains PCI DSS compliance. It also includes advanced fraud detection services like Fraud Protection and Dispute Automation. 

Transaction fees start at 3.49% per transaction for domestic transactions; rates may vary based on the type of transaction or international processing needs. 

Shopify

Shopify Payments is a payment processing solution integrated directly into the Shopify platform. It simplifies transactions by allowing merchants to manage all financial activities within their Shopify dashboard. Plus, it offers POS hardware for small businesses with physical stores.

The platform is PCI DSS compliant. Moreover, it employs advanced tools to detect potentially fraudulent transactions.

The best part is that Shopify is free to use for Shopify merchants. However, it charges you for card payments with a 2.9% + $0.30 per transaction in the U.S., though rates can vary depending on your country or plan.

What are the latest payment trends? Discover the answer in our blog!

How to choose the right payment method for your business?

Choosing the right payment method for your business requires understanding your customer base, business needs, and costs. Analyse the demographics of your customers, including their age, location, and payment preferences. For instance, younger customers tend to prefer digital wallets and cryptocurrencies, whereas older customers lean towards credit cards and bank transfers. 

The type of your business also plays an important role. Digital wallets are more suitable for e-commerce sites, while brick-and-mortar stores need point-of-sale terminals for card payments. Plus, if your business offers high-end goods and services, you’ll need to implement bank transfers and credit cards as payment methods. For smaller transactions, digital wallets will do the trick. 

In addition, make sure to evaluate the fee structure for each payment method — some have monthly fees, while others require a fee for each transaction. Finally, ensure your chosen payment method follows the financial regulations, this is especially important for global businesses.

In conclusion

The choice of the payment method will either make or break your customer’s experience. So, make sure you choose wisely for your business while keeping their needs in mind. Our lists above focus on payment methods and providers that offer the perfect blend of practicality and convenience. Hopefully, now you have a better understanding of the different payment methods for your business and how they can help the checkout process.