In 2015, 144 billion payments made by consumers were paid for by using a credit or debit card, check, or ACH payment.
If you want to ensure that paying for customers is convenient as possible when shopping at your business, you should really look into all kinds of different payment channels.
But what are they? And what are the different payment channel options? Keep reading to find out!
What is a Payment Channel?
A payment channel is a way that your customers can make a payment towards your business. They can do this anywhere that you accept payments.
Some people confuse a payment channel with retail channels. But retail channels include:
- Online shopping
However, when it comes to a payment channel, it’s more about how the channels are related to the retail channel. For example, it’s about how the payment is made rather than what method.
For example, some payment channels include:
- Physical POS system
- Online checkout solutions
- Mobile payment options
- Phone payments
- IVR payments
There will definitely be some overlap between retail and payment channels. For example, if you’re going through a brick-and-mortar retail channel, you’re probably processing the payments on an actual POS system (a cash register).
Some brick-and-mortar locations also take payments on tablets or smartphones throughout the store. The relationship between the two different types of channels can be important because you want to make sure you have a cohesive payment system that customers find easy to use.
To make it easier for them, you should also make sure you have multiple channels to increase the different options people have to choose from.
Different Types of Payment Methods
We mentioned a few of the different types of payment channels, but there are many more as well!
Even though there are so many different options, don’t worry. You don’t have to implement all of them at once.
Physical POS System
A physical POS system is one of the more traditional payment channels. You’ll probably recognize it as just a cash register. This is typical to have if you have a physical business so that customers can easily make payments right in your store.
Mobile payments are important if you have a business that’s never in one spot, like a food truck or flea market merchant. This payment channel is great because you won’t have to haul around a bunch of different methods for payment.
You can easily use this with the help of your phone, some apps, and maybe even a card swiper that you can plug into your phone!
Some people who have physical stores also like these payment options better because they’re faster and easier to use.
eCommerce websites are a great way to do ACH payment processing or online payments. While it’s great for businesses who have a shopping cart on their website, businesses who charge members by signing up for memberships, donating, or paying rent can all use an online payment system as well.
To set this up, you’ll need to make sure that you have an online shopping cart and a payment processor. Different companies will charge you different fees for using their payment processors or services, so make sure you read everything before you sign up!
Virtual terminals will let you manage and process payments either on the phone or during in-person transactions. These are great because you don’t need a physical card to pay. Because there’s no physical card, you also don’t need your traditional credit card terminal.
You’ll use a virtual terminal software to process people’s transactions. This is great for people who have a physical business, but it’s also great for people who are proving services virtually and don’t have the ability to swipe a credit card.
Many businesses that offer services, do recurring billing, or B2B companies actually use this type of payment channel. When they input the information, the virtual terminal will tokenize the card and securely make the payment.
How to Decide With All the Payment Channel Options
With all of these different options, it can be difficult to decide which one to use. If you can’t decide, figure out what your customers want and go from there!
Ask your clients what they prefer to use or which system is more convenient for them. You can do this by sending out surveys or even asking them for feedback.
If a lot of your customers are requesting a certain type of payment method that you don’t offer, it might be time to change things up a little bit. However, make sure that whatever channel you add is actually what customers are looking and asking for.
For example, if you have a lot of elderly customers, you probably don’t want to use online or mobile payments as it might be difficult for them to figure out.
At the same time, make sure that you choose something that makes sense for your business. If you are a largely physical store, it wouldn’t make sense to have all kinds of online payments and no physical POS.
Learn More About Payment Channels
These are only a few different things to know about payment channels, but there are many more things to keep in mind!
We know that running a business can be stressful and overwhelming, but we’re here to help you out.
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