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Payment Options: How Should You Collect Money for Your Business?


Deciding which payment options are best is a critical decision small business owners must make. While you want to make paying for services easy for the consumer, you'll need to determine which payment method will be the easiest and least costly for you. On one hand, paying the old fashioned way--using cash--is one of the fastest and most satisfying ways to get paid. However, if your business operates online or if you aren't in close proximity to customers, cash payments are nearly impossible to receive.


At one time, checks were a popular way to conduct business, however, check fraud wasn't as big of a booming business as it is today. One big risk of accepting checks is receiving a bad check. Making good on a bad check is far more difficult than collecting through credit card or cash. To reduce your changes of accepting a bad check, write down the buyer's driver license or passport number on the check. Ask the person to sign the check in your presence and compare the signature on the check with the I.D. card. Avoid checks with low numbers and compare the last three or four digits on the check to the Federal Reserve number on the right hand corner of the check---the numbers should match.

Merchant Credit Cards

Payments using Visa, MasterCard or American Express is probably the first choice for most consumers, especially when shopping online. However, merchants must investigate and determine if their volume warrants the fees associated with credit card purchases. When creating a merchant card account using VeriSign, business owners have an initial and yearly start up fees. A typical set fee is $249 along with an ongoing $59.95 monthly charge. Online merchants can conduct up to 1,000 transactions per month at $0.25 per transaction.

Another less expensive option is through This system has a $99 set up fee and only $20 per month for maintenance. The service allows you to accept all major credit cards, debit cards and even gift cards at $.10 per transaction with a $.25 daily batch fee.


PayPal is a popular method offering three service levels--Website Payments Standard, Website Payments Pro and Payflow Payment Gateway. Each level affords the merchant with a higher level of service based on your transaction flow and need for online invoicing.

Payments Standard and Payments Pro allow you to accept major credit cards, debit transactions and instant bank account transfers. For $30 a month, Payments Pro allows you to access payments directly from your site. Although Payments Standard is free, you can only access payments through the PayPal site. Transaction fees vary based on the number of monthly transactions--basically the more you sell, the less you pay.

Payflow Payment Gateway allows you to conduct the same operations as the other two levels but also offers telephone payment processing by phone, fax or mail. You also receive fraud protection and ongoing account monitoring--all for roughly $20 to $60 a month (in addition to a $180 to $250 set up fee). 

The bottom line is that small business owners should determine who their customer base is, how much business they will do each month and how fee-based services impact their pricing before deciding on a payment method.  


Gina Ragusa is a freelance writer and mom from sunny (and sometimes not) South Florida. Her 15 year experience ranges from writing about banking to tattoo parlors. Read more about her adventures at

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