The 3 Biggest Payment Methods in the World.
There are ever increasing online payment methods available nowadays. However, with so many payment options, you may be overwhelmed for choice. It may be a struggle to find the Best Ways to Accept Payments From Your Customers. It’s even more complicated for SaaS (Software as a Service) and subscription businesses to make the best choice in order to manage sophisticated payment processes. Because of the nature of payment processes changing in recent years, businesses might want to look into the different types of invoice templates that could help them make use of these different processes of payments with their clients.
Push and Pull Payment Methods.
In order to decide which payment method will fit your business best, you must know about push and pull methods. Should you opt for a push or pull method? As a merchant account holder, push means you have to make a request for payments from customers, who then pay you using a check or cash or tell you to charge their credit card. For pull methods, you would already have some form of authorization from your customer to charge their credit or debit card or to deduct an eCheck or ACH payment directly from their bank account.
Also consider if you require mostly one-time or recurring payments.The push method is more preferable for one-time payments and the pull method is best for recurring payments.
The pull payment method is the best option for subscription businesses that allow merchants to withdraw payments on their own, without having to request payments from customers. Don’t forget, recurring payments require prior approval and authorization to charge on a periodic basis and have to be agreed upon by both sides.
Here are the 3 Most Popular Payment methods:
1. Credit Cards
Credit cards are the main form of pull payment methods for recurring payments. Such payments are guaranteed upfront, which eliminates settlement issues. Merchants find it easier to pull payment from customers’ cards once they have agreed to allow you to use their credit card numbers. Also, the cards can be run several times, if needed, automatically, saving time and costs.
However, the risk of fraud and chargebacks cannot be ignored, but these can’t compare to the benefits and convenience of using this method. Merchant fees charged by merchant account providers are also negligible when compared to the ease of accepting payments that a merchant account provides.
2. Bank Transfers
Another popular pull payment method is the bank transfer or ACH, wherein the merchant gets the confirmation from customers to use their bank account information to deduct a payment directly from their accounts using a secure connection. Lower fees compared to other payment methods makes this a very popular option, even globally. However, if you do business globally, you must realize that payment processing varies from country to country. The US system uses the Automated Clearing House (ACH). Others include Canada’s Pre-Authorized Debits (PAD), U.K. Direct Debit, and Europe’s SEPA (Single Euro Payments Area). As a merchant, you must be aware of the countries and types of bank transfers you will support and their associated fees.
Electronic wallets, also known as ewallets, is a third-party payment method. The company providing the ewallet service is responsible for handling the entire process, data handling, and security, of the transaction. The most popular example of ewallets is PayPal, with almost 20 percent of global reach compared to a given local market. Amazon Payments, Google Wallet, Apple Pay, and Samsung Pay are other similar examples. These are all global players in the electronic payments market.
With the rising popularity of subscriptions for services, most spending will be in the form of recurring, pull-payments. Additionally, credit cards are likely to become even more popular, with major ewallets gaining ground. Further, bank transfers will remain popular in certain regions. However, there is a growing need for global standards around authentication to improve acceptance of this payment method.
Ewallets continue to be a widely popular payment option, thanks to the flexibility and simplicity for customers and merchants, respectively. It would help SaaS and subscription businesses to analyze and assess payment methods to make the best choice to grow your business and please your customers.
Contact Us for more information on Credit Card Processing, or eChecks and ACH Transactions. Or take us up on our FREE Merchant Account Analysis offer. We’ll analyze your merchant account rates and let you know how to Save! If you are ready, you may be able to Switch and Save!