I run a service business; Which payment solution should I use?
When you are the founder of a business where you provide a service, it can be a bit confusing trying to figure out HOW to take payments from your clients.
For higher ticket items where you aren’t getting too many - the best method is usually that you send them an invoice and they pay you via bank transfer. No fees and simple for all.
However once you start getting into services where you want to make the administration easier , it needs a bit more thinking about! I've pulled together a short summary to help get you started. I’m comparing the main players in this space - GoCardless, Stripe, Paypal and Square.
Remember though, i’m writing fhis in May 2023 and specificities of solutions like these can change, so please do check the latest information on each providers website before proceeding. So first - A summary of each provider’s pros and cons.
GoCardless:
Pros: Specialises in bank transfers (Direct Debit) and recurring payments and offers competitive pricing and transparent fees - lowest at the current time. It provides easy integration with existing invoicing systems and supports international payments- really great for streamlining payment collection for subscription-based services.
Cons: Primarily focuses on bank transfers, so may not be suitable if clients prefer credit card payments ( it can do them, just not the focus for GoCardless) and it has limited payment options compared to more versatile platforms
Stripe:
Pros: Supports various payment methods, including credit cards, digital wallets, and mobile payments and offers an intuitive and developer-friendly interface. There is easily available extensive documentation and robust APIs for easy integration. and it allows customisation of the checkout process. It also offers international payment capabilities.
Cons: Transaction fees can be higher compared to some other payment processors and customer support might have limited availability for certain business sizes or plans.
PayPal:
Pros: Widely recognized and trusted by customers and offers diverse payment options, including credit cards, PayPal balances, and digital wallets. Easy setup and user-friendly interface and provides invoicing features and customizable payment buttons. Also supports international payments.
Cons: Transaction fees can be relatively higher, especially for international transactions. PayPal has been known to freeze accounts temporarily or impose restrictions in certain cases. Limited customization options for the checkout experience.
Square:
Pros: Offers a comprehensive range of payment solutions, including mobile card readers and online payment processing. Simplified setup and user-friendly interface. Supports in-person and remote payments. Provides additional business management features like inventory management and customer analytics. Really this is a solution more suited to those with a phyisical store/ need for face to face payments
Cons: Transaction fees for remote payments can be higher compared to some other providers. Some advanced features may require additional hardware or software.
So that’s a very top level summary.
I would say if you want to take recurring payments or provide a link on a website or on other marketing channels for customers to pay you - GoCardless and Stripe both do a great job. The fees on Gocardless are slightly lower and i slightly prefer it for subscriptions. Both are easy enough to create one off payment links to send to customers.
A Note About Security:
Clients may approach payment links with caution due to concerns about online security. I was chatting just recently to a client who was very cautious about clicking on my GoCardless link as she had been warned to be careful of links in emails.
When implemented properly though, payment links can be a safe and secure method of conducting transactions. Some common concerns include those like Phishing Scams where fraudulent emails or messages containing fake payment links designed to steal personal or financial information. This is where if you arent 100% sure of the sender its important to verify their authenticity and that of the payment platform before clicking on any payment link.
On the other hand, payment links from reputable providers offer several security measures to ensure the safety of transactions:
Secure Payment Gateways: Trusted payment platforms, such as GoCardless, Stripe, and others mentioned earlier, prioritize security and employ industry-standard encryption technologies. These platforms invest in robust security measures to protect sensitive information and facilitate secure transactions.
SSL Encryption: Reputable payment gateways and online platforms utilize SSL encryption, a standard security protocol that encrypts data transmitted between websites and users' browsers. This encryption safeguards payment links and ensures the protection of client information during transmission.
Trusted Providers: Opting for well-established and reputable payment solution providers reduces the risk associated with payment links. Conduct thorough research, choose trusted providers with positive reviews and a proven track record, and prioritize their use to instill confidence in the safety of clicking on payment links.
By adhering to best practices, using trusted payment platforms, and transparently communicating the security measures in place, you can ensure a secure experience for both you and your clients. These precautions help foster trust and reassure clients that clicking on payment links is safe when conducted through reputable and secure channels.
For more blogs to help you run your business in a way that means you get to spend more time on the parts of it that light you up - take a browse of my blog catalogue
