6 Reasons to Accept Payments Online as a Small Business

Erin OsterhausMay 15, 2024

Reviewed By: The Amplify Business Banking Team

In today’s digital age, convenience and efficiency reign supreme. That means that accepting payments online has become more than just a trend; it’s now a necessity for small businesses and freelancers seeking to expand. Whether you’re a budding entrepreneur or have been freelancing successfully for years, integrating online payment options into your business plan is crucial for growth and success. In this article, we’ll explore the top reasons why embracing online payments is essential for small businesses and how it can elevate your financial game.

1. Cater to Changing Consumer Habits

The way consumers make payments has evolved significantly. In fact, according to a recent survey, 6 in 10 Americans now say they make “only a few” or no purchases with cash. Just five years previously, only 32% of those surveyed made the same statement. The trend in recent years has definitely been moving toward a cashless society, and this trend is especially pronounced in the world of ecommerce.

Whether shopping online, paying for services, or sending money to friends, online payments have become the standard. By accepting payments online, you’ll align your business with these changing habits. The easier you make it for customers to engage with your products or services—and pay you for them—the more likely it is that your business will grow.

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2. Expand Your Customer Base

Online payments break down geographical barriers. Imagine this scenario: You run a boutique jewelry store in a charming corner of Austin, TX. While your unique handmade pieces have garnered a loyal local following, you haven’t been able to build a solid customer base outside of the Austin area.

Now, picture a different scenario. With a simple payment link on your social media channels, or a well-structured online store, your small business can attract customers from across the globe. This expanded reach opens up new opportunities for growth, allowing you to tap into markets you might not have considered otherwise. It’s like having a virtual storefront that’s open 24/7, ready to serve customers from any corner of the world.

3. Enhance Customer Convenience

In addition to expanding your potential customer base, online payments can attract new clients purely through their innate convenience. For instance, if you offer services that cater to busy professionals who are constantly on the move, they might find your company’s website while on a business trip halfway across the country. This is when online payments can come to the rescue. If your website offers a secure payment portal that allows this potential client to effortlessly make a payment using their preferred method—whether it’s credit and debit cards, Apple Pay, or any other popular option—they’re much more likely to engage your services. After all, if they had to engage in time-consuming phone calls, send checks in the mail, or make arrangements for in-person visits, they might be discouraged and decide to work with a different company that does offer online payments.

4. Secure Payment Processing

Security is a paramount concern for both businesses and consumers, where trust hinges on safeguarding sensitive financial data. As a small business owner or freelancer, reputation and reliability are cornerstones of current and future success, and accepting online payments can help build that trust.

For instance, if you were the owner of a local bakery, accepting cash for your pastries and other treats seems like a straightforward way to manage your business. However, while cash transactions are a well-known means of exchange, cash comes with some inherent risks. It can be vulnerable to theft, mishandling, or even simple human error in counting change.

By accepting online payments through a point of sale system, customers can make payments via credit cards or mobile apps, ensuring a digital trail of every transaction. This shift enhances security significantly, as there’s no longer a need to store large sums of cash on-site, reducing the risk of theft. Payments are processed electronically, leaving no room for counting errors or mishandling of physical money. And finally, your customers benefit from the added layer of security provided by encryption and fraud detection systems.

5. Efficient Recurring Billing

Another reason to accept online payments as a small business: it’s easier to manage recurring monthly charges, such as subscriptions or memberships. For example, if you are the owner of a small fitness studio whose primary source of income is from monthly memberships, managing those memberships could be a time-consuming process if you had to manually collect all those fees. You would likely have to pay an employee to send out reminders and manage the process every month, not to mention your business would lose revenue from a higher number of missed payments.

But if your fitness studio used an online payment system with a user-friendly online portal, you could streamline the entire billing process. Customers could input their payment information and authorize automatic recurring payments. As a result, you would no longer have to worry about chasing overdue payments or handling stacks of paperwork. You could thereby significantly reduce administrative costs, and maintain a positive cash flow, and provide a better experience for your members.

6. Diverse Payment Methods

Online payment processing opens the door to a wide array of payment methods, and therefore a wider array of potential customers. Imagine you own a cozy neighborhood café that’s been serving delightful treats for years. When you started out, you might have only accepted cash payments due to technical or financial limitations. However, after a few years, you’ve decided to embrace online payment processing to offer diverse payment methods.

Now, your customers can order their favorite latte using various payment options–credit cards, debit cards, mobile payments, and even peer to peer payments like Venmo. By setting up a merchant account with an online payment services provider, you can revolutionize business. When you accept a wider range of payment methods, you can attract a broader audience, including tech-savvy millennials who prefer digital wallets and tourists who appreciate the convenience of card payments.

Online Payments Can Help Grow Your Business

The era of online payments is here to stay, and small businesses and freelancers should seize the opportunity. Accepting payments online not only meets customer expectations but also opens doors to growth, security, and financial efficiency. As you plan your business strategy, remember that integrating online payments can be one of the most impactful ways to grow your business in the digital age. By accepting payments online today, you can put your business on the path to success.

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Erin Osterhaus

Erin is a personal finance writer based in Austin, Texas. Her work has been featured on TechRepublic, Yahoo Small Business, and Entrepreneur.com. She’s been passionate about helping others manage their money since she successfully paid off $60,000 in student loans in four years. When she’s not writing, Erin loves reading, studying languages, and spending time with her family.