It’s without a question that every transaction counts when you are a small business owner. That’s why managing payments efficiently is one of the most essential things to consider. Choosing the right payment method helps your business with smooth cash flow and puts you in a better position to be a trustworthy business to your customers.

With so many different payment methods out there, we know it can be overwhelming to look for one that aligns with your business needs. You want to make sure it’s cost-effective, reliable, and easy to integrate.

To make your decision easier, we’ve curated a list of the 10 best payment methods for small businesses. In this article, you’ll learn the pros and cons of each method, how they work, and which options align best with your goals, customer preferences, and operational needs.

Payment Methods for Small Businesses

To help you make the best choice, we’ve rounded up ten of the most effective payment methods for small businesses, each designed to meet your specific needs and help your business succeed.

1. Direct Debit

Direct debit can be a streamlined payment method for small businesses. It allows you to pull payments directly from customers’ bank accounts. Direct debit payment methods can also be used for one-off payments.

Pros:

• Ensure regular and predictable cash flow
• Lower transaction fees compared to credit cards
• Fewer payment failures

Cons:

• Takes at least 3 days to clear your account
• Not suitable for small businesses that need to collect payment instantly.

2. Debit and Credit Card Payments

Debit and credit cards are some of the most common payment methods for small businesses. Since customers overwhelmingly prefer to pay using a card, small businesses need to set up credit card payments for their business to not lose out on sales.

Some credit card processing services for small businesses are Stripe, Square, and PayPal, among others.

Pros:

• Smooth and fast checkout process
• There are security features to protect both businesses and customers
• Encourages larger purchases, helping increase average order value

Cons:

• High processing fees
• Risk of chargebacks and disputes
• Maintenance costs for services such as point-of-sale terminals or online payment gateways

3. Digital Wallets

Digital or virtual wallets are online payment methods that allow customers to store their payment information on their mobile devices securely. Digital wallets are quickly becoming one of the preferred payment methods for small businesses as they are convenient for customers.

Consumers can use digital wallets like Apple Pay or Google Pay to make purchases with simply a tap of their phone using the NFC technology.

Pros:

• Convenient, fast and contactless
• Offers advanced security through tokenisation, encryption, and biometric verification
• Supports loyalty integration and personalised marketing

Cons:

• Requires a compatible point-of-sale system or payment gateway to process payments
• Limited acceptance in certain regions

Digital wallets are the fastest-growing payment method in the world, with Asia leading the charge. DSGPay’s multi-currency virtual accounts allow you to streamline transactions, facilitate cross-border transactions, and receive funds from local and SWIFT payment networks.

4. Cash Payments

While cash usage has been on a steady decline, cash payments are still accepted as a payment method for small businesses.

Pros:

• Allows immediate receipt of funds.
• No transaction or processing fees

Cons:

• Security risks (theft or loss)
• Harder to track and manage for accounting

5. Cheque Payments

The use of cheques is also becoming less common as different online payment services for small businesses grow in popularity. Cheque payments involve a small business receiving a physical cheque and then the business having to deposit the cheque into the bank account.

Pros:

• No upfront fees
• Useful for large transactions and record-keeping

Cons:

• Time-consuming and outdated
• Manual handling (have to deposit cheques at the bank)
• Delayed processing

6. Online Payment Gateways

One of the best payment methods for small businesses is online payment processing. Small businesses can integrate an online payment gateway on their website or e-commerce platforms. However, you’ll need to compare the features and price structures of different gateways before selecting the one that suits your business needs the best.

Pros:

• Enables 24/7 online sales
• Support different types of payment methods, such as debit/credit cards and digital wallets.
• Automates payment tracking and reporting

Cons:

• Setup and transaction fees vary by provider
• Requires some technical setup and maintenance
• Chargeback risks
• Processing times can vary

7. Buy Now Pay Later (BNPL) 

Small businesses can offer their customers the option of Buy Now Pay Later, or BNPL. This payment method allows the customers to make a purchase immediately but pay the amount in instalments spread out over a fixed period.

Pros:

• Increases average sales
• Businesses usually receive the funds upfront
• Enhances competitiveness for businesses

Cons:

• Higher transaction fees
• Customer repayment risk

8. Email Invoices

If you’re an independent contractor, email invoicing might be one of the best ways to accept payments for your small business.

You can provide the details of how to proceed with the payment in the email to your client. This can include embedding payment links that redirect your client to a payment page where they can enter their card or bank details.

Pros:

• Ideal for remote and service-based businesses
• Customizable with your branding
• Supports payment links, allowing clients to pay via card, bank transfer, or gateway

Cons:

• Higher chance of missed or ignored invoices
• Limited real-time payment confirmation
• Security risks

9. Bank Transfers

Bank transfer as a payment method for small businesses involves sending funds directly from one bank account to another. Wire transfers and Automated Clearing House (ACH) are considered to be methods of bank transfers.

Pros:

• Secure and reliable method
• Lower transaction fees
• No middlemen or third-party platforms

Cons:

• May take 1–3 business days
• Cross-border transfers may incur extra fees or unfavourable exchange rates depending on the bank

10. Cryptocurrency

Finally, cryptocurrency can also be a payment method for small businesses. Cryptocurrency payments are a decentralised payment option that might attract a different segment of tech-savvy customers.

Pros:

• Fast and borderless transactions
• Can serve unbanked or underbanked customers

Cons:

• The volatility of cryptocurrency valuations
• Uncertain regulatory landscape
• Complex tax implications
• Hacking risks

Popular Payment Platforms for Small Businesses

Now that you’ve learned about the potential payment method suitable for your small business, let’s explore some of the most popular payment platforms used by many small businesses in the market.

Payment Platform	Transaction Fees	Subscription Fees per Month
Square	2.9% + 30¢ online/payment 2.6% + 15¢ in-person/payment	– Free plan available – Plus: $29 – Premium: $79
Stripe	2.9% + 30¢ online/payment 2.7% + 5¢ in-person/payment	– No monthly fees for standard accounts – Custom pricing available for enterprise solutions
Helcim	Base fees + 0.5% + 25¢ online/payment Base fees + 0.4% + 8¢ in-person/payment	No monthly fees
Shopify	2.9% + 30¢ (Basic plan) online/payment 2.7% (Basic plan) in-person/payment	– Basic: $29 – Standard: $79 – Advanced: $299
Clover	3.5% + 10¢ online/payment 2.3% – 2.6% + 10¢ in-person/payment	Virtual Terminal: $14.95 after 90-day trial
Payment Depot	Base fees + 7¢ – 15¢/payment	$79 – $199
Stax	Base fees + 8¢ – 15¢/payment	$99 – $199

DSGPay is Your Ideal Payment Provider

It’s important to select the right payment methods for your small business based on the nature of your business, security measures, cost and fees, convenience, and customer preferences.

With DSGPay, you can streamline your sales process, enhance customer satisfaction, and improve your cash flow by collecting payments more efficiently. We understand the unique challenges that small and medium-sized enterprises face better than anyone else.

Our tailored solutions are designed to meet these specific needs, ensuring that your business runs smoothly and thrives in a competitive market. Whether it’s managing multi-currency accounts, speeding up payment processing, or providing secure and reliable international transfers, DSGPay is here to support your growth and success every step of the way.

How DSGPay Can Support Your Small Business Operations

Feature	Details
Multi-Currency Management	– Manage funds in 14 different currencies from a single account. – Ideal for global business operations. – Handle money in USD, GBP, EUR, HKD, and more.
Faster Payments & Reliability	– Receive money up to 7 days faster. – Achieve 95% settlement rates. – Experience 10% lower refund rates.
Cost-Effective International Transfers	– Send money internationally to 81 countries, including key Asian financial hubs. – Avoid expensive SWIFT transfers and card fees. – Benefit from mid-market rates and tailored features.
Enhanced Security & Instant Notifications	– Safer than traditional card payments. – Instant payment notifications will keep you informed.
Build Trust with Local Account Details	– Display your business name in the account details. – Establish credibility in key financial hubs.