3 reasons why your business must support electronic transactions

A business using electronic transactions

Paying for goods or services with a credit card has been standard practice for decades now. We’ve been handing over (or swiping) plastic at retail stores and reading 16-digit numbers over the phone for a long time.

When the World Wide Web came along, major vendors saw a new, global platform for selling their wares. They were already accepting plastic in stores or by mail order, so they were in a good position to transfer those systems over to their websites.

Small businesses, too, saw the potential for online sales. They could make their products available to anyone in the world. But accepting payment in any fashion beyond a check or money order was difficult. And that limited their sales.

Their only real options for accepting credit cards was to try to get a merchant account through their bank, or by piggybacking on a service like Teleflora. The internet was so new, though, and some financial institutions were still wary.

A new movement

PayPal made waves in the small business online payment world when it launched in 1998. Individuals and companies could easily send and receive funds via a credit card or bank account to a friend or family member – or as payment to a business for a product or service.

Soon, there were more options. Financial software developers started offering payment solutions to their users. Payment “gateways” like Square, Stripe, and Authorize.net emerged. Integrated with merchant accounts, they could be used alone or integrated with accounting software and websites. Vendors started selling small card-swipers that could be clipped onto a smartphone or tablet to process mobile payments.

So today, whether you’re selling pottery at a small craft fair booth or ringing up sales on the floor of the Consumer Electronics Show, you’ll have multiple options – with multiple fee schedules.

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Numerous services

The financial transaction processing field is a competitive one. It can also be confusing. You’ll choose a supplier – or suppliers – that’s best for your specific business needs, whether you accept credit cards on your website, within your accounting software, over the phone, or at remote locations. The players are the same sometimes, but you may be dealing with multiple service providers.

And deal with them you must. Accepting credit cards – and in some cases, direct funds transfers – is a given in 2015. This ability offers numerous benefits, including:

  • More credibility. Consider your own experience ordering products or services, whether you’re online or at a retail store or standing in your back yard with the landscaping guy, ordering flowering shrubs. Aren’t you startled if you can’t just pull out your Visa card for payment? Kind of makes you wonder about the operation, especially considering that you just used a credit card to buy a flute from a small vendor at the Renaissance Festival.
  • Better bookkeeping. Merchant accounts and payment gateways that can be integrated with accounting software or websites will provide the most thorough accounting of your electronic transactions. But all vendors provide some type of mechanism for recording and tracking payments.
  • Improved cash flow. If you aren’t accepting credit cards, you are losing sales. And you’re receiving payments more slowly. Some accounting solutions let you attach a link that lets the customer pay online immediately.

Already accepting credit cards? Look around at what’s available these days and see if there’s anything that might be a significantly better option for you. Having state-of-the-art, convenient payment-processing tools can reflect well on your image and keep customers coming back.

Get more help with small business bookkeeping

Not sure how electronic transactions should fit into your bookkeeping strategy? The bookkeeping professionals at Block Advisors can help you with that and more.

Save time and money with other small business services like taxes, business formation, payroll, and beneficial owner reporting so you can get back to what you love.

This article is for informational purposes only. The content may not constitute the most up-to-date information and should not be construed as legal advice. 

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