A Guide to Retail Payment Options
For retailers, it’s common to simply accept cash and credit payments from their customers. But if those are the only payment options you’ll accept, you may be missing out on many opportunities to deepen relationships with your existing customers. That’s a great deal of avoidable revenue left unrecognized just because you don’t accept as many payment methods as you might.
In other words, a simple option for retailers is to accept as many payment methods as possible. The good news is that accepting additional payment methods isn’t a difficult task if you have a versatile point-of-sale (POS) system available.
By understanding the advantages of the various payment options available, you’ll decide which options add up for your store and your customers. Then, with the assistance of a versatile POS like Oscar POS, you’ll begin accepting most payment options with ease, creating better customer experiences and maximizing profits.
Cash is, of course, the foremost basic payment method you’ll accept as it doesn’t require you to research payment processors or worry about fees.
While there are some intricacies to handling and accounting for cash transactions, there are only a few downsides to letting your customers pay with cash. On the other hand, there are some benefits for your store and your customers:
- Cash is straightforward and convenient, especially for those customers who prefer to carry it with themselves regularly.
- Cash is a speedy method of payment as it does not require a long billing process.
- There are no transaction fees associated with cash payment. Once you accept cash payments, you retain more of the actual amount because you don’t need to carve out payment processing and other fees that credit cards and other payment types usually incur.
In short, accepting cash payments continues to be considered as the minimum entry requirement for a business arrangement and there are almost no drawbacks thereof.
Credit and debit card payments
Credit and debit cards are around for a while,and it’s the bare minimum retailers get to do to stay on track with their customers and competitors.
With that mentioned, it is actually good news for consumers and retailers, because there are many benefits of credit and debit card payments.
In addition, credit and debit cards:
- Accepting credit cards (specifically Visa, Mastercard etc) is so common that stores without the power to accept card payments could also be seen as behind the days and those stores may appear less authentic to certain consumers.
- With many consumers forgoing cash entirely, allowing credit card payments means you’ll avoid losing out on sales when customers just don’t carry cash.
- Credit card payments, unlike cash, are often deposited into your checking account automatically. While the precise timing can vary from one payment processor to another, you’ll typically expect the cash to hit your account soon after a purchase is completed.
The cautionary detail to all or any of the benefits? Fees. Processing credit cards means you’ll need to accept the associated transaction fees that payment processors charge. While these fees can vary, they average between 1.5% and 3 of the entire sale.
Mobile and smartphone payments
There’s another payment method experiencing rapid ascent over the previous couple of years: mobile and smartphone payments. These include common smartphone payment options like EasyPaisa.
Mobile payments are faster and easier for consumers who typically have their phones with them 24/7. In addition, there are some pros for retailers who accept mobile payments too:
- As mentioned, it’s easier and faster for purchasers to pay you in this manner and it is, thus, convenient for the customer.
- Mobile payments, almost like credit and debit cards, typically hit your checking account less than 3 days after the sale.
- When customers pay with their smartphones, you’ll potentially receive and track customer data, including how often they shop with you and you’ll engage with customers throughout the in-store journey by sending location-based updates on sales, discounts, and more.
Gift cards, store credit, and discounts
Gift cards and store credit are the types of payment methods that you might not have heard about that often. But they’re one among a retailer’s most powerful tools in building long-term, loyal customer relationships. In other words, store credit enables retailers to deepen and continue existing customer relationships, while gift cards help introduce new people to your store in an exceedingly low-risk way. Gift cards, store credit, and discounts are all levers you’ll pull to build better customer relationships and loyalty.
Gift cards and store credit encourages customers to spend more because they’re likely to spend more than the gift card or credit is worth. Plus, customers feel easier spending extra money with your store once they know you offer an excellent return policy—it’s a kind of a safety net. When it involves returns and exchanges, issuing gift cards or store credit in lieu of refunds enables you to be more flexible and artistic .
Overarching all of the advantages, store credit and gift cards enable you to stay money in your ecosystem. albeit the gift card never gets spent or an item gets returned/exchanged, that sale stays together with your business.
As we mentioned before, an efficient POS system offers your store the ability to simply accept as many—and varied—payment methods as you and your customers need, which includes custom payments like the following:
- Split payments: The classic example here is when a group wants to separate their restaurant bill among multiple credit cards. during a retail environment, this might appear as if two shoppers jointly purchased a gift with two credit/debit cards.
- Split tender: For flexibility, shoppers may like better to buy part of their order in cash and put the remainder on a credit card.
The main advantage of customer payments like those above is that they allow retailers to be more flexible, often to the benefit of both the shop and therefore the customer.
When you have a POS system that makes it effortless for you to accept varied payment options, there are really no drawbacks to accepting all of the payment types your customers want to use.
Offering customers the payment flexibility they’re trying to find means they spend more, enjoy a far better customer experience, and open up the chance for you to deepen and sustain long-term, loyal customer relationships.