Cash flow is the lifeblood of your small business. If you can’t keep the money coming in, well, you will probably have to look for a new day job. That’s why it’s so important that you make the invoicing and payment process as painless as possible, both for you and for your clients. Maybe it's time you tried mobile payments.
Move over, Visa! Whether your business is exclusively online or resides in an actual brick-and-mortar building, mobile and online payment systems can help you save money and increase your efficiency. Here are some reasons why your small business should embrace new mobile payment technologies.
1. Reduce Billing Headaches
If you sell digital goods such as virtual credits in web apps, ringtones or online games, you should take a look at companies such as Boku (named one of the top 50 venture-backed companies of 2010 by The Wall Street Journal), Fortumo and Zong. These companies allow customers to pay for your goods with their mobile number. The charge is then added to the customer’s mobile phone bill. When the customer pays their bill, the phone company will send over your slice of the pie. Adding to its convenience, each of these companies is available for use worldwide. The one downside is that the phone carriers often charge merchants a steep fee (up to 35%). If you are selling virtual products, this doesn’t matter quite as much, as your production and inventory costs are next to nothing. In addition, your customers are much more likely to make a purchase if it’s quick and easy. If they have to pull out their credit card information each time, they are much more likely to change their mind about purchasing. It's all about convenience.
2. Bypass Credit Card Fees
Forget receiving cash payments — these days, customers expect to pay with their debit or credit card. But for small businesses and freelancers, the credit card fees can take a sizable chunk out of your bottom line. So why not bypass those fees, or at least pay a smaller percentage? Mobile payment giant Obopay allows you to receive payments from Mastercard credit and debit cards, as well as from Visa debit cards. It doesn’t charge you anything, but does charge the customer a small convenience fee; you can, however, choose to absorb that fee yourself. If most of your payments are small, check out Venmo. This innovative company is trying to upset PayPal by offering what it calls a more social experience. With Venmo, you can charge customers by sending a “bill” to their e-mail address, mobile phone number or even Twitter handle. Payment processing costs nothing for them or for you, but there is a $2,500 monthly limit for both making payments and receiving them.
3. Cut Down on Bookkeeping Hassle
If you are one of the four million small businesses that use QuickBooks, Intuit’s GoPayment could be a perfect solution. Intuit, the financial software giant that produces TurboTax and Quickbooks, has also jumped into the mobile payment fray. GoPayment provides a card reader for your Android, Blackberry, iPhone or iPod Touch, which allows you to accept credit card payments from Discover, Visa or MasterCard. One of the great things about GoPayment is its integration with Quickbooks. Credit card transactions made through GoPayments can be easily downloaded into the accounting software — no more having to type in payments manually! This, to me, is an awesome feature as I’ve discovered that when I have to enter transactions manually into my accounting software package, I often mistype amounts or completely skip over transactions altogether — and what a pain that is when trying to reconcile the bank statement!
4. Turn Your iPad Into a Cash Register Someday our kids will hear the word “cash register” and wonder what type of antiquated device it was. Well, thanks to Square, that day is growing closer and closer. Square has released a card reader/app combo for iPads that is an elegant alternative to the traditional check-out register. You can accept credit cards using the free card reader or manually enter cash transactions. Customers can sign receipts on the screen and then have those receipts e-mailed or texted to them. As you would expect from this type of cash register, analytics plays a big role. You can instantly track product sales by type, customer, day, etc. Finally, customers that you trust can bypass the credit swipe altogether and instead set up a tab-based system in which they simply pay by their name (which is linked to their credit card in your system).
Finally, let me give a shout out to the oDesk payment system. If you do hourly work, oDesk is an excellent platform to ensure that you will be paid on a weekly basis. No more waiting around for checks or haranguing deadbeat clients with reminder e-mails. oDesk has consistently provided me the fastest payment schedule I’ve ever had in my freelance career.
Mobile and online payments are exiting the realm of theory and prototype and are instead entering into the real world. Have you taken advantage of any of these mobile payment options? If you have used one of these (or any of their competitors), tell me about your experience in the comments section below.