Best online payment methods for small business in Singapore

Apr 05, 2024

In a world where businesses are rapidly blurring the borders between countries, cash and cheque as the primary modes of payment are simply not cutting it.

Cashless transactions are quickly becoming the staple of the business world, from giant corporations to small businesses alike. 

Especially in the Asian region, e-payments have become the heart and soul of the marketplace. Online payment methods for small business owners have become the primary source of accepting money in Asian countries.

Since 2019, more than 2 billion e-payment users have emerged in the Asian region, making online payment methods for small businesses an obvious choice. In Singapore's economy, 85% of small businesses have now adopted online payment methods.

E-payment technology has advanced beyond banks & cards

The demand for online payment methods for small business owners grew exponentially in a recent couple of years since e-commerce replaced brick-and-mortar shops and ushered in a new era of online shopping.

From ordering food to delivering groceries, users relied heavily on digital payments and therefore so did small businesses. The shift from cash to online payments was sudden and the popularity of digital payments has not diminished.

On the contrary, the ratio of using cash to that of using online payment methods fell to a staggering 17%. 

Contactless and cashless payments emerged as a clear winner of preferred payment methods in Singapore. Online payment methods have easily surfaced in banks since they eliminate the need for users to swipe cards or send checks to clear payments.

Evolving needs of businesses with the rise of new payment methods

Regardless of their size, businesses today are not just in competition with each other in terms of product and pricing, but they are also competing in the race to provide their customers with the most efficient, time-saving, and painless payment solutions.

Customers today are not just mindful of the pricing and the quality of products and services; they are also observing which businesses are offering the easiest and quickest cart-to-payment facilities.

The need for online payment methods for small businesses is also on the rise since businesses can increase their revenue swiftly without waiting for checks to clear.

1. High-speed transaction

In the age of cash and cheque-reliant economy, businesses had to carefully manage their budgets and order supplies from vendors in advance to ensure they do not run out of raw material while hoping that the check clears on time.

With online digital payments, businesses can order supplies whenever they need them without appending their cash flow. Having your customers and your suppliers on the internet allows you to increase your revenue and your production multifold.

2. Simple UI & convenience

Cashless payments are all about convenience, for both customers and suppliers. Both parties prefer online payments since there easy, quick, and hassle-free.

The best payment apps for small business owners come with the simplest user interface features, allowing businesses to carry on their operations and send and receive money with the click of a button.

3. Security

With the advancements in online payment methods today small business owners require only their mobile devices to purchase and sell products.

With digital payment methods, business owners can make payments for supplies through their phones and protect their payment apps through biometric or pin-based security. Online payment apps are diligent with their data security and use encryption against online threats.

Choosing the best online payment methods for small businesses

Not all payment methods for small businesses are created equal. Choosing the best payment app from the available online payment methods for small business owners can be extremely challenging.

The ideal online payment solution for small businesses must be flexible, scalable, secure, and convenient. Consider these parameters while choosing the ideal payment method for your business:

1. Easy signup and onboarding process

 Your ideal payment solution should provide you with a seamless and hassle-free onboarding experience. As a small business owner donning multiple hats, the last thing you want to do is jump through hoops to get yourself onboard onto an online payment platform.

If a digital payment solution is taking weeks to review documents and approve payment operations on its platform, abort the plan immediately. Your ideal online payment app should have a smooth KYB process.

2. High success rates

Online payment methods are popular due to their lightning-fast payment processes. High success rates of payment processing are the true marker of whether an online payment solution is ideal for your small business or not.

If your customers are trying to make payments and failing over and over again, they are far more likely to never shop from your business.

Similarly, if you are experiencing repetitive low success rates to make payments for supplies, your production speed might get impacted. Choose a payment solution that has an easy checkout and an uninterrupted transaction flow.

3. Low charges

As a small business owner, keeping your expenses as low as possible is a contributing factor towards making a profit.

Online payment methods that provide your business with the payment pathway will charge a percentage for every transaction that goes to its platform to and from your business. These costs can quickly build up to become huge amounts.

Be cognizant of the types of charges the digital payment solution is levying on you. From setup fees to transaction charges and even hidden fees, be sure to investigate every possible expense prior to making a long-term commitment.

Online payment methods for small businesses in Singapore

1. PayPal

PayPal is the world's largest online payment method. As one of the biggest and most widely recognizable fintech companies, businesses can accept and make payments for goods and services through PayPal.

Paypal is easy to use as you can use it on your phone and process payments with credit and debit cards. As one of the most sought-after online payment methods for small businesses, Paypal levies some fees for processing business transactions:

For online transactions, 2.9 % of the transaction amount is charged. 

For international funds received, the transaction fee is 4.4 %. An additional flat fee depending upon the currency used.

If your business processes around 3000 US dollars per month, you are eligible to apply for a Paypal merchant rate that may be further reduced processing fees. Paypal’s premium account (known as PayPal Business) is designed for small business owners and solopreneurs with premium features and lower transaction fees.

There are several advantages to using PayPal. Firstly, Paypal uses two-factor authentication to save passwords, and OTP to protect your business data. With an easy-to-use interface, Paypal also frequently offers discounts for premium accounts and other services. 

Some widespread disadvantages are the hidden extra charges that Paypal incurs on top of its already high fees. Users have complained about getting their accounts randomly charged or frozen for no reason.

This can be a pain point for a small business owner like yourself.

2. ApplePay

ApplePay is an innovative online payment app, with a large user base of up to 36% of iOS users in Singapore.

ApplePay is an exclusive platform that is only accessible by iOS users. However there is a caveat — only iOS users using iPhone 6, MacBook with Touch ID, iPad Air 2.2 and newer versions can avail the platform.

Given its exclusive status, ApplePay is clearly a highly secure payment app that protects your bank and card information. The payment app charges absolutely zero additional fees for merchants.

Although there are no transaction charges from ApplePay, your credit card provider's basic processing rates and fees will definitely apply. The only substantial implementation costs would be purchasing or renting an ApplePay compatible terminal for your brick-and-mortar store. 

ApplePay globally has one of the fastest and most convenient transaction processes. On top of their no-hidden-fees benefit, ApplePay’s unmatched security and independence from constantly relying on an Internet connection are certainly impressive.

On the downside, ApplePay has run into software issues every now and then, and merchants are still subjected to the high fees of using debit and credit cards.

ApplePay currency offers no assistance for online shopping which can be a problem for small business owners who only rely on online businesses.

3. Google Pay

Google Pay is an online payment app and digital wallet platform. Just like ApplePay is for iOS users, Google Pay allows Android users to make cashless transactions through their devices.

It eliminates the need to have physical cards and can be easily used in any POS system to make contactless purchases. 

Google Pay protects its customers' sensitive card data by transmitting a virtual card number to the merchant instead of revealing real debit or credit card information.

It also offers biometrics and PIN protection to add an extra layer of security. For business owners, Google Pay has absolutely no charge on bank transfers. However, the payment platform levies a 1.5% charge on debit cards and a 4% charge on credit cards.

Google Pay’s biggest benefits are its no hidden fees and real cashback features. Although it allows businesses to make secure transactions, it really lacks in the customer support department.

It also has a history of low success rates and is only limited to your mobile devices.

The competition in the fintech industry for the best payment apps for small business owners is fierce, but the truth is, there is no clear winner.

It depends on the type of small business and the requirements that truly determine whether an online payment method or application is ideal or not. The good news is that's not just online payment methods that can make your life easier.

With virtual cards, small business owners in Singapore can seamlessly process a transaction with their suppliers and vendors across borders.

Take Volopay cards, for example. Virtual cards can effortlessly integrate themselves with online payment methods for small business owners and assist them in optimizing their subscription and invoice management.

Similar read - Best eCommerce platforms for small businesses in Singapore

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