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Accepting Alternative Payment Methods

Posted on 13 June, 2016

While deeper motives — like the desire to change the world or fulfill your passion — are a good part of starting a business, they are no substitute for the central mandate, which is to make money. And, of course, making money requires getting that money from customers. More and more, however, this simple task becomes complicated. Cash and checks are no longer the only game in town. Accepting alternative payment methods such as credit, debit, digital payment services, online payment options, and even “cryptocurrencies” like Bitcoin are becoming increasingly prominent.

Regardless of business category, every business benefits from making it easy for customers to use their preferred methods of payment. However, this is particularly the case for companies in high-risk industries like travel and pharmaceuticals. But where should you draw the line? What forms of payment should you consider accepting at your business, and which of the options available today are more trouble than they’re worth?


Accepting Alternative Payment Methods

Image via Flickr by 401(K) 2013

Cash remains king. There are no transaction fees or extra costs associated with accepting this form of payment, and according to a 2014 report from the Diary of Consumer Payment Choice, 30 percent of consumers prefer to pay in cash. There are no disadvantages here and plenty of advantages, so anyone in a position to accept cash (that is, anyone who does any portion of their business in person as opposed to online or via phone) should do so.


While once a very common payment option, checks are quickly becoming a thing of the past. In fact, many customers only use checks when they have no other choice. According to the 2014 report cited above, only 3 percent of clients actively prefer to pay by check. Nevertheless, given that checks come with no additional fees or requirements — beyond the risk of bounced checks and similar issues — there is no real harm in accepting them.

Electronic Fund Transfers

Thanks to various forms of electronic fund transfers, checks aren’t the only way for customers to send you money directly from their bank accounts. While e-check processing does come with fees, they tend to be relatively small — around 0.5 to 1 percent — though some companies simply charge a flat rate of just under a dollar per transaction. As a result, this option is especially useful for businesses that see high-dollar sales or are setting up recurrent payments.

Credit and Debit Cards

Credit and Debit Cards

Image via Flickr by frankieleon

If you’re not accepting credit and debit cards already, you’re missing out. Whether your business relies on brick-and-mortar locations, telemarketing, or an online store, this method of payment has become the expected option for most customers. In fact, 40 percent of customers now prefer to pay with their debit cards. That’s great news, because the fees for debit transactions are some of the lowest around, starting at less than 1 percent of the total purchase amount.

Read more: High risk credit card processing.

The fees vary more widely for credit card transactions. For example, a Visa credit transaction fee typically ranges from 1.6 percent to 2 percent, while a similar American Express transaction incurs a charge of over 3 percent. Even so, providing customers with a variety of options is almost guaranteed to increase profits by far more than the cost of these fees.

Digital Payment Services

Digital Payment Services

Image via Flickr by dinogee

This new branch of payment technology is centered on “near-field communication.” The basic concept is that you can use your mobile phone or a card like the one pictured above to transmit your payment information securely with a single tap. Google launched the first major near field communication option in 2011, and this form of payment has grown dramatically in the years since.

As recently as 2014, it would have been easy to dismiss near-field communication payments as a gimmick. However, several major players, including Apple, Samsung, and Google, have now stepped into the game, and major retailers such as Target, Best Buy, Subway, and Walgreens have gotten on board, too. While it’s not mandatory to accept this method of payment today, installing a near-field communication terminal at your store is one possible way of future-proofing your business.


Of all the items we discuss in this list, cryptocurrency is likely to seem the most outlandish. To get a better understanding, let’s take a closer look at Bitcoin, the flag-bearer and key player for this digitally driven currency. Bitcoin’s pitch for its value is based on several factors: it’s a global currency, it’s purely digital, it’s designed for security from the ground up, and the complicated process of “creating” bitcoin includes built-in countermeasures against risks like inflation.

During the initial years after its launch, Bitcoin saw a massive spike in value. For some, this made it seem like an unstable currency or the gambler’s option. However, in the time since, the value and patterns of growth have stabilized. As a result, more retailers are starting to consider Bitcoin and other forms of cryptocurrency as payment.

Should you accept bitcoin? It depends on your regular customer. While there are now over 10 million bitcoin users, the demographics are relatively narrow. These tend to be people under age 35 who work in more high-tech fields. The exception comes in the form of global economy workers looking to avoid the hassle of consistently changing their funds from one currency to another. If that description resembles your regular customer, accepting bitcoin will likely do some major good. Otherwise, you can safely skip this option without losing out on sales.

As always, there isn’t a single right answer to the question of which form of payments you should accept. The best payment options depend on the type of business you’re doing, the demographics of your average customer, your geographic region, and much more. However, by using the information above, you can make an informed decision on which payment options make the most sense for you and your business.

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High Risk Merchant Account Services

Accept all major credit cards

Regardless of Credit History!