4 ways how payment processing can help scale your business
For most, payment processing is just a tool that allows merchants to run an online business. An e-shop without a payment processor is just a simple website filled with beautiful pictures of products. It’s a mandatory part of any functional business. When you are in a local market and all you have on you is your credit card, you won’t go to the merchant that only accepts cash. You will choose a seller with a POS card terminal. Therefore, only having a payment method does not mean people will actually buy from you. You should adapt to the payment needs of a customer. Merchants should think of payment processing not only as a tool to sell products, but also as a part of their business growth.
Let me show you 4 ways how payment processing scale businesses.
1. Expanding your market
Choosing a payment processor that allows you to accept payments globally will allow you to scale your business. Even though local processors charge less, being open to global markets will benefit your business in the long run. Being available to a broader audience will bring more clients. More clients mean more sales. More sales mean more revenue. Sounds like a dream, right?
This is especially applicable to small businesses. Finances are a more delicate topic for such businesses rather than for medium or big ones. Usually, small businesses decide to save money and offer payment methods for local customers only. This decision puts unnecessary bounds to their online business. Being open to global markets from the start benefits them in the long run. Let’s face it, pretty much every business wants to prosper for a long time. You can never know when your business will receive global recognition, but you want to be able to monetize it when the opportunity arises. Furthermore, by only focusing on a local market you risk being a small business forever. In addition, global payment processors use payment methods that are recognizable everywhere. Offering a familiar method on your online shop will most certainly reduce the cart abandonment rates and as a result increase your sales.
Accepting payments from all around the world with a global payment processor will scale your business by expanding your market, reducing the cart abandonment rate and thus increasing your sales.
2. Providing reliability
Most merchants tend to choose a provider with the cheapest pricing. There’s a reason people say “you get what you pay for”. I am not saying that cheap = bad. What I am saying is that it’s not the only feature you should be looking for. Having cheap pricing will save you money per transaction, but what actually is important – having transactions actually go through successfully. When a problem occurs and payments do not go through, you might experience more loss than what you would gain with low fees. Therefore, choosing a technically reliable provider should also be a top priority.
While you might not be an expert in evaluating whether the payment processor is technically reliable or not, you can choose a provider with high-quality customer support. Problems with transactions most likely will occur. So when they do, you want to solve them ASAP. Every hour spent with payments being declined on your website can mean damages. With a single declined transaction you risk discarding a client. This is a bad reputation for your business and the client might not buy from you again. Having a processor that offers quick, high-quality customer service is a key to solving problems quickly.
Ensuring reliability for your payment processing allows you to scale your business by preventing declined transactions. A single declined transaction can mean a single declined client and less sales in the future.
3. Monthly revenue streams with recurring payments
When choosing a payment processor you shouldn’t only think about the whys but also about the hows. Choosing a convenient payment model is crucial if you want to scale your business.
Subscription-based commerce is an on-growing field. 80% of software startups and other merchants offer recurring payments for their clients. Subscription model guarantees regular communication with your customers, strengthening the connection between you and your customers over time. In addition, when offering subscription based products or services you can be sure of more stable revenue streams. Focusing on retaining your clients is a safer bet. Building a customer base rather than focusing on new client acquisition is a more reliable revenue stream with least possible risks. Recurring payments can scale your business by deepening the relationship between you and your clients, thus allowing you to build a loyal customer base.
A drawback is that acquiring a customer for subscription based payments is a harder task than for a one-time payment based product. You must take it into consideration that you encourage customers for a bigger commitment than for a single payment. Thus, you should try to reduce the fear of commitment. A good example is making recurring payments easy to pause and cancel or giving an ability to alter the volume of goods received. A customer is more likely to pay once than commit for a period of time, thus showing freedom in changing their plan conditions reduces the fear of committing to a subscription.
4. More payment methods = better
As we have already mentioned, when there is no payment method a buyer can choose from, it will not lead to a sale. All your marketing efforts are in vain if they do not lead to a sale. If a customer is interested in your website and products, only technicalities prevent him from making a sale. Thus providing multiple payment methods is a way of making sure that when a promising customer enters your website and chooses a product, they will have a payment method to choose from. Most payment processors apply pricing per transaction, so you only have to pay them when you make a sale with their method. Implementing multiple methods usually only costs time. Which we believe is a worthwhile investment. Integrate now, experience the benefits later. If you do not match that client’s desirable payment method, you prevent potential sales. Transaction costs that the processors apply shouldn’t matter much if they enable you to make your sales.
In addition, every now and then new payment methods hit the market as innovative, sometimes faster and better than others. Being open to payment trends is the key to scaling your business. You might never know when you will hit a jackpot with a payment processor most suitable both for you and your clients.
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