Small Business: Keeping up-to-date with payment options

The payment landscape is evolving, and small businesses need to keep up if they want to capture the most sales. 

A recent report found that the number of consumers choosing to pay with digital wallets such as Apple Pay and Google Pay when shopping in person has doubled in the last two years, going from 5% to 10%. 

When it comes to online shopping, usage of third-party payment methods like PayPal has nearly tripled, to 27%,  in the last two years, according to the report from Bank of America Merchant Services. 

When consumers can't pay by their preferred method, 17% said they would not make the purchase, the report said. 

The biggest challenge to small businesses is not the availability of the technology, but the “willingness to purchase it, to see the value in that purchase and to understand and use it,” said Bill Clark, a consultant with The Strawhecker Group, an Omaha firm focused on the electronic payments industry.

Small businesses should periodically re-evaluate what’s available and decide whether they want to upgrade, Clark said.

“A payment is a payment,” he said. The question is “what else do you want wrapped into your payment.” For example, he said, a loyalty program could be tied into your digital payment program.

When choosing what type of payment options to offer, it really depends on what you’re looking to get out of your POS system, as well as the experience you want the consumer to have, Clark said. 

The good news is most credit card terminals and point-of-sale, or POS, systems now have advanced capabilities including built-in Near Field Communication (NFC) allowing merchants to accept contactless/digital wallet payments for example, said Joe Sacks, a payments and point of sale consultant with Automated Merchant Services in Malverne, which offers payment solutions.

With systems that accept contactless payment, customers can pay without having to hand over a physical credit or debit card, he said. For in-store purchases, they open their app, select their credit/debit card, and wave their mobile device near a contactless reader to complete payment, said Sacks.

He said merchants may not even realize they have this capability, but many credit card terminals and POS systems already come equipped with this functionality as long as they’ve been upgraded to accept EMV chip cards.

The benefit is “it significantly speeds up the payment time for the consumer and speeds up the line for the merchant,'' said Barb Trawick, a senior vice president and small business product director at Bank of America Merchant Services, based in their Jacksonville, Florida, office. 

Vadim Nayman, owner-managing partner of Bagel Master in Syosset, agrees, adding that customers appreciate having the option of paying via digital wallet.

 “Customers weren’t asking for it but when they found out we were accepting it, they said it made things a lot easier,” said Nayman, whose shop is a customer of Automated Merchant Services and uses VeriFone terminals.

There are multiple terminal/POS options in addition to VeriFone. For example, Bank of America Merchant Services offers merchants an $89 mobile credit card solution called Clover Go that can turn their phone or tablet into a credit card reader capable of accepting digital wallets, said Trawick.

Still, even if you don’t have the ability to accept digital wallet payments, offering multiple payment options is important, the experts say.  Among the top payment methods in the Bank of America Merchant Services report, debit was the only one that saw decline in use, although it's still widely used by consumers (see https://tinyurl.com/y2vevnam).

Declining debit card usage could be attributed to a number of factors, including increased use of digital wallets and other mobile payment options,  as well as people wanting to score points or cash-back rewards from using their credit cards, Trawick said.