Online Payments for Small Business: Everything You Need To Know

online payments for small business: everything you need to know

Every small business can take online payments. (Yes, even you!)

As a small business owner, I understand the importance of offering online payment options to my customers. Not only does it provide convenience for them, but it also opens up new opportunities for my business to reach a wider audience. These days, consumers expect the ability to make purchases with just a few clicks, and with an online payment system, I’m able to meet their expectations and stay competitive in the market. 

Why offer online payments?

Not only is it more convenient for clients, it also can streamline operations and improve cash flow management for small businesses. With traditional methods such as cheques or cash, there can be delays in receiving payments and difficulties in tracking transactions. (More admin work? No thanks!) However, with an online payment system in place, payments are processed instantly and are easily traceable, saving time and reducing the risk of errors. By automating payments, you reduce the administration associated with manually creating invoices and following up on overdue accounts.

ℹ️ Read more about why you should add automation to your biz here .

Another benefit is that it allows small businesses to tap into global markets without being limited by geographical boundaries. By accepting various forms of electronic payments such as credit cards or mobile wallet apps, I’m able to cater to customers from all over the world. This expands my client base and increases revenue potential significantly, while providing a seamless user experience for customers, regardless of their location.

Online Payments Explained

Many small business owners don’t take the steps to implement online payments because they’re scared of what they don’t know (at least, I was!). Have you ever wondered how online payments actually work? Let’s break it down and demystify the technology behind it.

First, when you enter your card details on a website, they are encrypted using advanced encryption algorithms. Simply put, this ensures that your information is securely transmitted to the payment gateway (like Stripe) without being intercepted by hackers. The payment gateway is like the middleman between the merchant and your bank. It takes your encrypted data and decodes it so that it can be processed by the relevant financial institution.

Once your transaction reaches your bank, it goes through a series of checks to validate whether you have sufficient funds or credit available for the purchase. If everything checks out, an authorization code is sent back through the payment gateway to confirm that the transaction was successful. And just like magic, within seconds you get a notification saying “Payment Successful”! As new security features are developed, online payments are becoming even more secure and convenient.

Now that you understand how payments work, let’s talk about which platforms could work for your business.

Online Payment Platform Options for Small Businesses

There are quite a few online payment platforms to choose from, however, when it comes to determining which one is the best, it ultimately depends on your specific needs and preferences. 

Two platforms that I have personally used – and regularly set up for clients – are Stripe and Square.

Online Payments With Stripe

Stripe is known for its flexibility and developer-friendly tools, and allows businesses to accept payments seamlessly across different platforms and devices. It also boasts advanced features such as subscription management and customized checkout experiences. As recently as a year ago, I’d have said that Stripe is for more tech-savvy entrepreneurs, but that’s not necessarily the case anymore. While Stripe has more integration options with other online tools (i.e. Stripe is the back-end payment processor for apps like Jane, Heartbeat, etc), it has introduced small business-friendly features like Payment Links that are relatively easy to use.

Online Payments With Square

Square offers unique advantages in the small business space. Their integrated suite of services includes:

  • payment processing
  • a website builder
  • point-of-sale (POS) systems
  • inventory management tools
  • subscriptions
  • appointment booking
  • online checkout links
  • in-depth analytics

Square has done a great job of building out their offering to include almost everything a small business owner would need to run their business. This comprehensive approach can be especially beneficial for small businesses looking for an all-in-one solution.

And, have you heard? Square’s innovation doesn’t stop! I was thrilled to see this in my inbox last week…

online payments for small business

Yes, you read that correctly! You can now accept contactless payments through Square on your Android phone!! You don’t need a Square reader or any other specialty payment hardware to get paid!

Pricing and Features

Both Stripe and Square are wonderful options, with pricing (currently, as of the publication date) at 2.9% + C$0.30 per successful online credit card charge. This may seem like a lot of money, but if you take into consideration the amount of time you’d spend creating invoices, sending them to clients and following up when accounts are overdue… well, it probably doesn’t seem like that much after all! (Psst… remember, payment processing charges are business expenses!) I’ve got a handy calculator you can use to see how much your transactions would cost.

Costs aside, I really love that both platforms are feature-rich and offer flexibility for taking payments, so that the client experience is quick and easy.

Here are a few of my favourite features that both Stripe and Square share…

  1. Checkout/payment links
    Create an item (it can be a physical item or a service product) and you’ll get a custom URL so that customers can check out – pay you! – using that link. The link can be added as the destination of any clickable object (think: “buy now” button) on your website or as a hyperlink in an email blast to your marketing list. The uses are endless!
  2. QR codes
    When you create an item (see #1), you’ll have the option of downloading/saving a QR code image for that product. You can add it to digital or printed marketing materials (Canva graphics, anyone?), posts you share online (via image sticker to an IG story), etc. Anyone with a smartphone can scan it; they will be directed to the custom checkout page for that item where they’ll enter their credit card info (or use Google Pay / Apple Pay, if you’ve enabled those payment options) and pay for the item. Easy peasy!
  3. Subscriptions
    Both Square and Stripe have the option of creating subscription payment links, making it simple to purchase a membership, or anything where recurring fees are involved. And, clients have full control; they can cancel at any time via the opt-out link in their monthly email receipt.
  4. Easy refunds
    Simply log into your dashboard and find the desired transaction. There will be an option to refund it; simply follow the prompts.

Which Online Payments Platform is Best?

Ultimately, the best online payments platform is subjective and dependent on what matters most to you – whether it’s global accessibility and developer agility like Stripe or all-in-one convenience like Square. When making a decision, it’s helpful to evaluate your requirements, including goals for scaling your business and the digital tools or functionality you may require in the future. 

ℹ️ Get tips for scaling your biz here .

No matter which platform you choose, you know you’ll be making it easy for your customers to buy from you, whenever and wherever the feeling strikes! 

👉 Thinking of adding online payment functionality to your site or social pages? If you’d like help deciding which option is right for you – or implementing the recommendations I’ve outlined above – reach out. I have worked with many clients to get them up and running quickly, and you can do it, too!

💬 Ask me anything about online payments, adding e-commerce functionality to your website or creating payment links by commenting below!


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