Cash and credit cards have for a long time been the favored payment methods for small businesses, regardless of what services or goods they offer. But today there are plenty of other methods that can make payments easier for both you and your clients. Introducing them would be a smart move that can open new opportunities for everyone involved. We will help you decide which method(s) of payment to go for.

The most common payment methods

Choosing the best online payment method for your business isn’t the easiest task, as each option has its own advantages and disadvantages. Let’s analyze some of the most common payment methods available today:


Clients make cash payments using paper money (bills, banknotes) and coins. The business manages these types of payments from a point-of-sale (POS) system (e.g. a cash register). Cash payments used to be the most popular method of payment, until other payment options, starting with credit cards, began replacing them.

  1. Advantages
    Accepting payments in cash is handy as it allows you to obtain what the client owes you immediately, instead of waiting for the transaction to go through the proper channels. It also reduces operating expenses by removing any sort of fees that other payment methods (e.g. credit cards) may incur.
  2. Disadvantages
    Relying on cash payments only will cut the business out of the opportunities from clients who may not have any cash on them and only wish to pay using a card or other forms of payment. Also, running a cash-only business increases the risk of theft and mishandling money.


Your clients may also pay for your services or goods using credit or debit cards provided to them by their card issuer for these purposes. Most people in today’s society expect a business to accept card payments and are often turned away by those that don’t.

  1. Advantages
    Cards have replaced cash as the preferred payment method thanks to their convenience, security, hygiene, and the ability to speed up the checkout process. Moreover, they can be used online and allow a small business to improve its cash flow, expand its client base, and show it’s legitimate.
  2. Disadvantages
    That said, the fees incurred by banks and card issuers for credit card transactions and other related expenses may negatively affect your bottom line. The only way to avoid this would be to pass the cost to your clients. 

Introducing card payments also carries significant expenses for the equipment, PCI (Payment Card Industry) compliance, and your chosen payment processor’s services. You may also face chargebacks (if the client isn’t satisfied with your service or product) or even credit card fraud.


Although somewhat obsolete in this day and age, paper checks were at the height of their glory in the 20th century. Documenting the date and payment amount, checks authorize banks to transfer funds from the client’s bank account to yours as payment for your services or goods. Today, paper checks have been largely replaced by their electronic version – eChecks.

  1. Advantages
    Checks are handy for small businesses as they only require a business account to accept this type of payment. Clients like them because they are safe, convenient, easy to use, and allow them to post their payment via mail.
  2. Disadvantages
    That said, there’s an inherent risk for the business accepting them – bounced checks. This may push you toward expensive and uncertain methods to try and recover your money, such as taking things to a small claims court or having to resort to a collection agency.

Online payments

Making payments online has become popular thanks to the developments in the IT field and the growing number of businesses creating their own websites. Through electronic payment gateways and digital wallet apps, paying online is possible with a range of different payment options, including eChecks, direct debit payments, credit cards, and other payment cards.

  1. Advantages
    Online payments via platforms like PayPal, Venmo, Chase Quickpay, or even Facebook, are convenient, easy, fast, and budget-friendly options for both clients and businesses. They provide clients with a calculation of how much your services or goods would cost them before finalizing the purchase.

    For businesses, they save time and allow the immediate collection of the client’s billing and shipping information, streamlining the entire delivery process. Moreover, smart credit and debit cards, as well as digital wallet apps, can facilitate contactless in-person payments via near-field communication (NFC) technology.
  2. Disadvantages
    That said, this form of taking payments does incur service fees from payment gateways and third-party payment processors. Furthermore, it opens possibilities for cybercriminals to block online payment methods, or worse, get their hands on your clients’ financial information. Online payments may also suffer outages due to technical or server problems.

Mobile payments

Clients may use their mobile devices, like smartphones and tablets, to make purchases toward your business. This increasingly popular method includes a wide array of options for payment – money-transfer applications, NFC technology and digital wallets, and mobile card readers for swiping credit and debit cards.

  1. Advantages
    Mobile payments can lower your business’s transaction costs compared to traditional payments, making a significant impact on its bottom line. For clients, mobile payments are a convenient way to pay for goods and services. 

    They allow them to leave their cards and cash at home and simply take their mobile device with them. It is also often easier and more hygienic to pay using a mobile wallet than swiping or inserting a credit or debit card.
  2. Disadvantages
    That said, mobile payments may pose a security risk due to the possibility of data breaches. If the worst happens, it could cause a tense relationship between you and your client as they trusted you with their sensitive information.

The best payment methods for different small business types

Not every payment method is ideal for every type of business. Different small businesses, as well as their clients, have different requirements and characteristics, so choosing the best payment method will largely depend on these factors. Let’s see what payment methods are the most suitable for different categories:

Mental health businesses (psychologists, psychotherapists, and mental health coaches)

If you run a small mental health practice, your patients’ privacy is at the top of your priorities. For this reason, you need to use a highly secure, ethical, and HIPAA-compliant (Health Insurance Portability and Accountability Act) payment gateway, such as Square. 

This platform allows you to accept and charge credit cards, which is convenient for most patients today who prefer instant money transfer. You can accept payments online and in-person, and the money is deposited directly into your bank account. A capable practice management software will typically feature Square integration. 

That said, some of your patients may feel more comfortable paying with cash or check, so make sure to give them those options, as well.

Business, financial, and legal coaches

Advisors in the branches of business, finance, and law work with clients who appreciate speed and ease when paying for their services. If you’re in one of these fields, you also want a solution that’s easy to set up and isn’t unreasonably expensive.

The most obvious choice is credit card payments via Stripe or Square. However, consultants in different industries or situations may also accept payments via checks, PayPal, direct transfer, and other methods, as long as they’re straightforward and safe. 

Do note that using some of the popular payment processors to charge for certain counseling services may be prohibited. For example, Stripe prohibits the use of its platform for mortgage consulting, credit counseling, and investment services, so make sure to read the fine print before deciding on any specific processor.

Fitness businesses and gyms

If you’re running a fitness business or gym, then a cloud-based service for credit card processing like Square or Stripe would be a great fit. Square, Stripe, and many other online payment processors are ideal because they support recurring payments, such as for gym memberships. 

This way, you won’t have to worry about tracking down your clients for payment once a month. Instead, their payments will arrive automatically without any effort from your or your client’s side.

Also, they support both face-to-face and online payments, so you can introduce online training services, and more. PayPal and NFC payments are also a solid alternative.

Hair, nail, and beauty salons

Hair, nail, and beauty salons typically accept payments in cash for several reasons. Cash is straightforward, easy to count, and it allows clients to tip your business with ease. Also, there are no fees or extra processing time involved in other payment methods. A check is a great alternative for more time-consuming and expensive services.

However, due to the popularity of cards and digital forms of payment, people are less inclined to carry cash or a checkbook with them, and refusing to accommodate them is bad for business. Moreover, cards are safer and more convenient for clients. So if your business can afford it, you should invest in a card reader or a swiping machine.

Other than that, consider introducing online payments if you wish to charge for your services in advance, as well as mobile payments if you want to cater to the younger generation that uses NFC technology and mobile wallets.

Real estate

The real estate industry’s most prevalent method of payment is still cash – especially popular in short- and medium-term deals. Cash is also suitable for monthly down payments and deferred payments. That said, keep in mind that most developers no longer allow cash payments beyond three years.

Dated checks are a solid alternative that is great for reservation payments, stretched down payments, and payments for balance payable. However, bank deposits and wire transfers are better for advance payments (not so much for reservation payments). They can also be used in balance payables and stretched down payments.

Home service (e.g. cleaning, handiwork, plumbing, electricians)

The easiest way for a home service business to collect payments, especially if you’re just starting out, is by cash or check. For one-time services, you can also accept online payments through PayPal or another merchant account that allows payments by credit card, debit card, or from a checking account.

Your regular clients can pay you using any popular method that is easy and comfortable for both sides – by cash, check, or credit card via Stripe, Square, or PayPal. You can even set up automatic recurring payments to avoid pestering your clients for money.

Teachers and tutors (e.g. online teachers, private online/offline tutors)

If you give online lessons to your students, the simplest way to charge them is through standard credit card and online payment gateways such as PayPal or Stripe – provided you have a bank account (you can still accrue money on your PayPal balance without a bank account but you can’t use it).

The simplest way to accept payments for private tutors that see their students offline is via cash or check. However, if you give lessons to some of your students on a set schedule, you can set up recurring payments for them on the supported credit card payment gateways. This refers to both online and offline tutoring.

If you’re running a tutoring business that employs multiple teachers, then you should focus on credit card processing platforms like Stripe, Square, or PayPal. They will streamline the process of charging for your tutor’s lessons, as well as making it easier to calculate expenses and everyone’s share.

Small retail shops

Small online and brick-and-mortar retailers can choose between many different payment options. If you have an e-commerce website with a popular provider, they may come equipped with a payment processor such as Stripe, Square, or PayPal – or will add them for an additional fee.

If you don’t have a website, or only operate in-person, then you can accept payments in cash, check, credit/debit cards, or through the increasingly popular NFC technology. Ultimately, it all boils down to what is more convenient for you and your customers, as well as if you want to keep up with the times and new technologies (your younger customers certainly do!).