Payment options for brick and mortar businesses are set in stone. Typically, they accept cash, LINX (debit and credit cards) and probably a manager’s cheque. Customers make payments in person over the counter.
On the other hand, if you are a newbie (a business that leverages social media and some semblance of ecommerce tactics) then you are potentially serving a wider and more dispersed market. However, you may not have the mean to effectively reach your customers. More than marketing is required to reach customers. You need effective mechanisms to complete the purchase process with customers you never see.
For this, you need to have all your ducks (or mechanisms) in a row. The internet gives you the means to interact with persons far and wide. Social media gives you the ability to selectively target persons with your messages. With courier services you deliver goods without leaving the store. Let’s explore the local mechanisms available to receive payments from remote customers.
Cash and Cheque
These requires contact between buyer and seller or at least the physical movement of cash or cheque from the buyer to the seller.
Bank Deposits
Sellers request buyers to deposit payments into their bank accounts. Some buyers will do it. Others will not stand in a long line and wait hours to reach the teller. On the other hand, some sellers don’t like the notion of giving their bank information to strangers. Others complain that payment reconciliation can be difficult.
Electronic Payment Mechanisms
The portable point-of-sale (LINX) machine is a good work around. Once you have the sales volume the benefits will outweigh the rental fee, transaction fee and the data cost. To receive a payment you or your representative must be in the presence of the customer. This may increase your cost of doing business.
Automated Clearing House (ACH)
Unlike LINX, this is location independent. The customer logs into her bank account online and transfers the payment to the business. It is not a universal feature available to all retail bank customers. Some banks may charge a fee for making interbank transfers. In other words, it is not a catch all option.
Bill Payment System
There are several services locally and the landscape is competitive. These services prefer clients with high payment volume potential.
Money Transfer Services
The cost of these services is high. This may result in an effective increase in the price (if the fee is passed onto the customer) or a cut in the mark-up (if the fee is absorbed by the seller).
Ecommerce Payment Systems
Locally, many see this as the holy grail of payments, if it ever reaches the masses. The costs is prohibitive and due to the high risk, banks are more interested in gilt-edged clients. Without this service many businesses are only wading in the ecommerce currents.
Alternative Payment Systems
The only local system of this kind is Paywise. Think of it like a bill payment system and Paypal. Cash is accepted from customers and the payments are processes electronically to your bank account. No hoops to get a merchant account. Wide customer reach. Automated notification and post to your website when payments are made. Easy reconciliation. Low cost. No long lines.
Brick and mortar businesses have several payment options. Similarly, newbies should provide customers with different payment options and let them decide which is right for them at the point of purchase.
