In this article, we’ll be discussing payment methods. No, this doesn’t mean we’re looking at things like credit cards, PayPal payments, etc. Instead, it’s focused on different ways in which you can charge customers for products/services.
The traditional method is to charge people the full price of what they pay for. But, can any of these alternatives offer something different that makes sense for your business? Read on to find out.
Subscription payments
Subscription payments are hugely popular and have become a great option for many online retail businesses. Customers pay a subscription fee, which gives them access to a set service or product.
Amazon has started doing this with its subscribe and save function. Instead of paying for a pack of toilet roll, you could pay a subscription fee and get send new packs every month, two months, etc.
The idea with a subscription is that you offer a lower amount than the cost of a product itself, to tempt customers into sticking with you. It’s highly beneficial as you have a base of customers constantly spending money every month/year.
This method makes sense for loads of different small businesses. If you sell any products or services that people may need to keep purchasing, the subscription payment method is worth setting up.
Bulk billing
With bulk billing, people aren’t directly charged for your services. Instead, the charges are billed to a financial provider of sorts. The most common example of this is bulk billing doctors.
Rather than charging patients per appointment or treatment, the costs get forwarded to their health insurance provider – or the government, depending on the country. It makes services more affordable for people while ensuring full payments are still received.
This concept can be fantastic, but it only works with a few business ideas. If your company is involved in the healthcare field, it could be worth looking into bulk billing if insurance providers cover your services. Alternatively, you could set up your own special insurance coverage or scheme that people can pay to join.
Here, it works a bit like a subscription in that they pay for the “covereage” every month, year, etc. This allows them to come and enjoy different services as often as possible – provided they fall under the coverage.
It’s quite complex, but if you’re in the healthcare field then it is a great approach.
Segmented payments
We’ve called this segmented payments, but it refers to any payment system where the cost of a product/service is split into segments. Effectively, people can buy now and pay later. You have payment providers like Klarna who let businesses accept this type of payment.
Here, the customer basically gets a small loan from the payment provider who covers the cost of the service/product. Your business receives all the money and the customer is now in debt to the payment provider.
Instead of spending $1,000 in one go, they can pay $500 now and $500 within the next 30 days. Offering this helps customers manage payments a lot better.
Loads of retail stores will benefit from this – to be honest, if you sell anything, it is worth implementing this payment method. You give customers more choices and can capture buyers you may have missed out on.
As you can see, there are other ways to take payments other than the traditional “buy it now” method. Look at these ideas, see if they match your business model, and consider implementing them today.
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