5 best payment methods for small business success and growth

Key takeaways:

• Offering diverse business payment methods can help your small business gain new customers.

• Credit cards, debit cards, and digital wallets are the most popular payment methods in the US, so limiting your payment methods to cash alone will exclude potential customers.

• However, merchants have to pay processing fees to accept card payments.

Small business owners have a lot on their plate, and managing financials and growth opportunities are important parts of a balanced business. The payment methods a small business accepts play a role in both‌, and they’re key to developing your business into new markets.

Most of us have taken out cash before going to a local market or stopped by a corner store and thought, “I hope they take cards.” While some businesses hold onto ‘cash-only’ transactions, even solo merchants have found opportunities to accept digital payments online and in person.

Digital payment popularity is growing globally, with 50% of global eCommerce purchases made by digital wallets and 34% covered by credit and debit cards¹. So, offering the right mix of payment options as a small business owner can help expand your customer base, open opportunities for eCommerce, and even help business owners grow globally. Let’s explore the pros and cons of popular payment methods.

1. Cash

You probably already accept cash at your business. Cash is a go-to method that’s free to accept and easily processed through your bank.

While cash is convenient and familiar, it’s also quickly becoming a relic of the past. In fact, non-cash transaction volume in North America is expected to grow 6.4% this year to $252.6 billion, with continued growth projected to reach $338.3 billion by 2028.² More consumers and businesses are moving away from cash to easy-to-carry cards or mobile payments, so limiting your payment methods to cash alone will exclude many potential customers.

On top of that, you can’t grow online if you only accept cash payments, limiting your long-term business potential.

2. Credit and debit cards

Cards remain a significant payment method for online shopping in the US, but their dominance in eCommerce is expected to shift. Digital wallets are projected to surpass credit cards, capturing over 50% of the market share by 2027.³ Despite this trend, credit cards still hold strong appeal due to loyalty incentives like discounts and rewards, making them a convenient option for businesses to accept and track.

You’ll need a payment service provider (PSP) or other processing method to accept cards. Luckily, it’s easier than ever to find the right processing service with specialized SaaS and eCommerce payment gateways for every business.

But card processing isn’t free. Small businesses typically pay a fixed fee plus a percentage rate of the total sale amount to process the payment. Combined, this is the Merchant Discount Rate (MDR).

Still, most businesses find the cost worth the reward when they can accept payments from more customers. Letting customers pay with credit and debit cards allows you to grow your business online and internationally.

3. Direct debit

Direct debit, often referred to as ACH payments in the US, isn’t the most common option for small businesses. However, it’s popular for businesses with large purchases or recurring transactions, such as subscription services or installment plans. ACH payments pull funds directly from the customer’s bank account on a schedule (with their approval), eliminating processing delays or missed invoices.

This cashless payment option can be more cost-effective than card payments, as ACH fees are typically lower than credit card processing fees. It’s especially valuable for businesses that want to reduce transaction costs for recurring or high-value transactions. To get started, businesses must work with an ACH payment provider offering reliable integrations and competitive rates.

Providers like Airwallex offer ACH payment options alongside other payment methods, helping businesses streamline payment processes and efficiently manage transactions across multiple channels.

4. Digital wallets

Digital wallets like Apple Pay, Google Pay, and PayPal are becoming increasingly popular in the US. They offer a fast, secure, and convenient way to make payments in stores and online. These apps are built directly into smartphones, allowing customers to complete transactions with just a tap or click—making them even more convenient than traditional card payments.

For many small businesses, digital wallets serve as an accessible first step into accepting digital payments. From independent sellers at local markets to retail stores processing online orders nationwide, these solutions cater to various needs. Their flexibility also supports business growth, seamlessly adapting as sales channels expand or customer preferences shift toward digital payment options.

5. Gift cards

Gift cards are another attractive option for accepting payments while improving customer loyalty. Businesses can offer physical and digital gift cards, providing customers convenient options to buy, gift, and redeem.

Like credit and debit cards, gift cards require an appropriate payment processing or POS system to handle transactions. While businesses typically pay standard transaction fees for selling gift cards, redeeming them often doesn’t incur additional fees. However, businesses should also consider the cost of producing physical cards, including design and printing.

US regulations govern gift card usage to ensure consumer protection. The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 requires:

• Expiration rules: Gift cards cannot expire within five years from the date of issuance or when funds were last loaded.

• Fee restrictions: Dormancy or inactivity fees are prohibited unless the card has been inactive for at least one year, and all fees must be disclosed upfront.

• Clear terms: Terms and conditions, including fees and expiration policies, must be transparent to consumers.

In addition to federal laws, many states have their own rules, such as prohibiting expiration dates altogether or requiring businesses to cash out low-value balances upon request. Understanding and complying with these regulations is essential for successfully offering gift cards to customers.

How to choose what payment methods to offer

There’s no one right payment method for every business, but as digital payment methods and providers continue to surge in popularity nationwide, they certainly give some food for thought.

Here are some key considerations as you decide which payment methods your small business should offer:

• Geographical location of your customers: Brick-and-mortar businesses looking to go online must consider accepting credit and debit cards, as well as digital payments.

• Cost: Some methods, like cash, are nearly free to accept, while cards and digital payments may require a payment processing provider that charges transaction fees. Businesses should weigh these fees against the benefits, such as increased revenue potential.

• Customer preference: Understand your customers and their payment preferences. An older audience may prefer more traditional payment methods like credit cards or bank transfers, while younger audiences may prefer digital wallets.

Choose a payment platform that grows with your business

Once you start digging, you’ll be surprised just how many payment methods are available for small businesses. From tried-and-true cash to modern mobile wallets like Apple Pay, small businesses can operate and accept payments from anywhere in the world.

However, a great business account is the first step to accepting any customer payments. Airwallex allows small and established businesses to open a Business Account, where you can open Global Accounts and accept online payments via low-code checkout solutions, or Payment Links and Plugins.

If you already have an eCommerce platform, you can use our no-code plug-and-play integrations with Shopify, Magento, WooCommerce, and more.

Sources:

1. https://www.statista.com/statistics/1111233/payment-method-usage-transaction-volume-share-worldwide

2. https://www.capgemini.com/insights/research-library/world-payments-report/

3. https://www.statista.com/topics/1118/credit-cards-in-the-united-states/#topicOverview