Here we’ll take a look at the best payment options for small businesses today. We'll compare online and in-person methods, explore the rise of mobile and contactless payments, and show how the right choices can directly improve your cash flow and help you manage trade credit more effectively.
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Choosing the right payment option for your business can be a surprisingly complex choice. With more options available than ever, it’s not simply a matter of effecting a transaction – the payment methods you offer can impact your sales, cash flow and customer experience.
Here we’ll take a look at the best payment options for small businesses today. We'll compare online and in-person methods, explore the rise of mobile and contactless payments, and show how the right choices can directly improve your cash flow and help you manage trade credit more effectively.
The short answer is: it depends on your business. A bustling café has different needs than an online retailer or a B2B service provider. The days of cash being the default are long gone – card spending keeps growing, and over half of shoppers find cash-only businesses inconvenient.
To stay competitive, you need to match your capabilities to your customers. The main categories to consider are:
For businesses that operate mostly online or need to take payments remotely, a strong digital setup ensures cash keeps flowing. Here are the most common online payment options.
A payment gateway is an online portal integrated into an e-commerce website that allows you to securely accept credit and debit card payments from your customers.
Services like Stripe and Shopify Payments are often built directly into online store platforms, offering ecommerce payment processing within your existing setup. While they offer a simpler checkout experience for customers, it also means you’re tied into that provider’s functionality.
A payment link is a shareable hyperlink that takes a customer directly to a secure payment page. Their flexibility makes them handy for freelancers, consultants, or any business taking deposits or custom orders. You can send a link via email, text, or any messaging app, allowing your client to pay in just a few clicks.
Modern invoicing software often allows you to embed payment links directly into a digital invoice. This is incredibly convenient for service-based businesses, as clients can review a detailed breakdown of charges and pay their bill in the same interaction.
The main drawback, however, is that it relies on the customer to take action, meaning you may need to do some chasing to get paid.
A newer and very effective online option is the instant bank transfer. Unlike card payments, which go through complex networks and incur fees, these are direct bank-to-bank payments.
Solutions like iwocaPay’s Pay Now can embed this directly into your checkout flow. It allows customers to pay you via an instant, secure bank transfer for free, avoiding card fees entirely. The system pre-fills all the payment details, so there's no room for human error.
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Card payments remain the most popular way for consumers to pay, making them an unavoidable option for most small businesses.
For brick-and-mortar businesses, there are two primary tools:
While essential, card payments come with costs. Every transaction includes a fee, which is typically a small percentage of the total plus a fixed amount (e.g., 1.75% + 20p). These fees can add up over time. There's also the risk of chargebacks and fraud, which can be both costly and frustrating to deal with.
The convenience of "tap-to-pay" has become the norm for a whole generation of shoppers.
Digital wallets, like Apple Pay and Google Pay, use near field communication (NFC) technology to allow customers to pay with a simple tap of their phone or smartwatch.
Mobile payments continue to break their own records for volumes. The main requirement is having a card reader or POS system that is NFC-enabled. Accepting these payment methods can lead to a smoother, faster checkout process and cater to a broader range of customers.
Some methods, like Direct Debit, come with additional protections like the Direct Debit Guarantee, which safeguards payers from unauthorised transactions and builds trust.
The best payment system is one you don't have to think about. Modern embedded payment solutions are designed to connect instantly with the other tools you use to run your business, keeping your data up-to-date across all your systems.
Many payment processors connect with popular accounting software like Xero, QuickBooks, and Sage. This automates payment reconciliation, so you don't have to spend hours manually matching transactions. Likewise, a good POS system can sync your sales data directly with your inventory management, giving you real-time insights into what's selling.
For B2B businesses, managing payments is closely tied to managing trade credit and cash flow. Offering your business customers credit is a powerful way to increase sales and build loyalty, but it comes with challenges. When you extend credit, you create trade receivables: money that is owed to you but hasn't been paid yet. This can tie up your working capital and exposes you to the risk of late payments or, even worse, bad debts.
It also streamlines your credit control processes, since the BNPL provider handles all the collections and defaults.
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There's no single "best" provider for everyone, as the right choice depends on your specific needs.
However, for B2B businesses looking for a complete solution, iwocaPay stands out by combining two powerful, distinct options:
Choosing a payment strategy involves understanding your specific business needs and choosing a mix of solutions that are secure, efficient, and customer-friendly. If you're a B2B business looking to offer flexibility without taking on risk, iwocaPay provides a complete solution that puts you in control.
If you’re ready to get more from your payments, book a demo today.
