Are you looking for an easy way to improve your small business’s cash flow? (Isn’t everybody?) Then consider accepting mobile payments from your customers.
Cash flow issues arise when small business owners have to wait a long time to collect on payments. Accepting mobile payments eliminates the wait time by enabling you to get paid on the spot as soon as you provide the product or deliver the service.
Mobile payment services provide you with a card reader device that you attach to your smartphone or tablet. Use it to swipe the customer’s credit or debit card and accept payments instantly. While most of us are familiar with mobile payments through product-based businesses such as food trucks, their applications extend to B2B companies and service providers as well. For example, if your business provides services at a location other than your business, such as a landscaping business that comes to customers’ homes or an IT company that provides services at clients’ offices, using mobile payments means you don’t have to send an invoice and then wait to get paid.
For companies that sell products at an outside location, such as a retailer selling its wares at a swap meet or a food vendor manning a cart at a community event, mobile payments boost cash flow by encouraging customers to spend more than they otherwise might. When customers are limited by the cash they have in their pockets, they’re less likely to make larger purchases or impulsive buys. If they can use credit or debit cards, however, they often spend more freely.
Other Ways Mobile Payments Can Boost Cash Flow
Eliminate slow or non-payers
There are no more worries about “The check’s in the mail” when you accept mobile payments. Even if your customers send their payments on time, checks can bounce. Mobile payments eliminate those risks altogether.
Using mobile payments cuts the time and manpower costs associated with invoicing, printing, and mailing invoices, not to mention following up with emails or calls to collect from late payers.
Gather additional customer information
Many mobile payment solutions integrate with loyalty programs that capture customer data you can use to market to your customers more effectively. That can persuade customers to spend more with your business, boosting your cash flow.
Improve customer satisfaction
Customers love the ease and speed of mobile payments. Of course, more satisfied customers means greater loyalty and more spending—which equals better cash flow.
Increase customer security
Compared to having to hand over their credit card to an employee (such as a waiter) who then disappears with it, many customers feel more confident if they don’t have to let their payment card out of their sight. Contactless payment systems such as Apple Pay offer even greater security due to their technology—no more worries about the potential effects a data breach could have on your cash flow.
Mobile payment services typically charge a flat fee for each transaction. However, as your company’s mobile sales increase, you can cut these costs (and up your cash flow) by switching to a monthly fee arrangement.
If your employees typically receive tips from customers, such as in a restaurant or beauty salon mobile payments can boost their cash flow, as well. Most mobile payment tools not only offer the option to add the tip on to the payment, but even calculate the tip for the customer. The ease of tipping, plus the fact that the employee is basically looking over their shoulder, makes customers more likely to tip and to tip bigger.
Square, PayPal Here, and Intuit’s QuickBooks GoPayment are among the most popular mobile payment options for small businesses. The latest wave in mobile payment is contactless payment technologies, such as Apple Pay and Google Wallet, which use near field communication (NFC) technology to transmit data wirelessly.
Before you choose a mobile payment service, consider your business’s needs, your customer base, and your budget. Be sure you fully understand the terms of the contract and any fees so you can select a product that will provide the proper ROI for your business.