I run a micro business on weekends, and since I don’t want to go through the process and expense of getting a traditional EFTPOS terminal, I haven’t been able to take credit card payments. Are there any simple and cost-effective options for me?
Traditional merchant facilities have become more outdated in recent times, mainly due to them requiring the purchase of a relatively costly terminal which needs a fixed line internet connection at all times. It can be prohibitively expensive to set this up, especially if you are doing so for a micro business, or one not based on the traditional bricks and mortar model.
It’s a common roadblock for people running microbusinesses. Thankfully, there are some, newer, more cost-effective solutions you can use.
One of the first, and most well-known solutions, is setting up a PayPal merchant account. PayPal has typically been associated with online shopping but you can also use it as a method for credit card payments. If you set up a PayPal account for your micro-business, you can then issue invoices to customers that use PayPal. Customers can then pay this invoice in their account, using their linked credit card.
There are some downsides to this solution – not everyone uses PayPal and invoicing can be another complicated process you’ll need to develop for your business to ensure payments are completed. You may find it simpler to only accept cash as invoicing is rarely as time efficient as other payment methods. You would also need to check the fees and charges for payments via PayPal.
A more modern alternative would be the payment platform, Square. Square enables you to offer Electronic Fund Transfer payments via your smartphone. You’ll need to purchase a Square adapter, a roughly $60 investment, that attaches to your phone and can scan credit and debit cards. The normal EFT process then takes place on the screen of the phone – prompting customers to enter their pin at which point the payment should be immediately approved. Payment is then processed electronically with the money placed in your nominated account, minus fees and charges from your bank and Square.
It’s important to remember that each Square transaction attracts a flat fee, which for businesses likely to complete a large number of small transactions in a day can add up.