A startup is the best way to start a business if you have no assets, but have a great idea and the desire to bring it to life. Since a young startup company has every dollar at stake, startups choose the Internet as the main tool for promotion and sales. Through the Internet it is possible to ensure worldwide fame and sales. Digital products can be easily downloaded, and the customer can pay for the delivery of interesting goods. But what about payment? Electronic payment systems can help a startup with this. For example, the most popular credit card for startups is the Mercury Mastercard. With this card alone, companies have a huge number of opportunities and advantages. Moreover, you can read more here, namely how to activate the card, how to purchase it, and so on. That is, only with this card companies can make purchases and pay bills online without problems.
What Is A Payment System?
An electronic payment system is a means of routing money between buyer and seller. The seller pays with his own currency; the provider transfers this money to the seller’s account. And it all works over the Internet. Payment systems eliminate the need for buyers and sellers to personally negotiate the payment method. Personal communication takes a lot of time for the seller, and the buyer is used to the fact that he can simply enter the card details and in a second receive confirmation of the purchase. Payment systems are necessary for modern business for two reasons:
- Shoppers are attracted to convenience and security;
- Sellers are focused on business, not on payment issues.
The Importance of Connecting A Payment System for A Startup
Imagine you received your first order, but you don’t have automated payment on your site. You arranged for cash on delivery with the buyer, shipped the product, and a few days later went to the post office to collect the money. What if the buyer cheated and doesn’t pick up the goods? And if there are a thousand buyers, you’re not going to run to the post office every day and manually count the profit? And if the buyer is ready to pay only in Bitcoin Cash or Perfect Money, you can’t create a wallet for each payment system, can you?
A startup without an electronic payment system loses half of its potential customers. “Oh, they came up with a cool thing, you have to call them to order, you can’t just click… No way,” is what every other visitor to your site is thinking. If your product is a real innovation, you already know the importance of automation and simplifying processes.
Advantages of Payment Systems
It would seem that they are clear, but still we should list them:
- Fast account opening and getting started, compared to classic banks.
- Expansion of your potential target audience to many countries of the world.
- Lower costs of entering foreign markets, as there is no need to develop your own payment system to accept foreign payment cards, as well as to pass all the necessary certification.
- The increase of the speed of funds crediting, as well as the reduction of transaction costs when a significant turnover is reached.
- More favorable rates of currency conversion, which are much closer to the interbank rate than in case of currency conversion through regular banks, where the difference with the official rates of central banks can reach 5% and more.
- Multi Currency account, which allows you to keep your income in different currencies, including cryptocurrencies.
Disadvantages of Payment Systems
There aren’t many, but there are some nonetheless:
- Excessive preoccupation with the security of their system. This is expressed in the fact that if an error is detected in the documents submitted for the account opening in the payment system when comparing them to the copies of the original documents, your account can be blocked and it will be very difficult to unblock it.
- Limited functionality of some payment systems. Some of them do not work with legal entities, and others cannot keep funds for more than a certain period of time. Virtually none of them can issue loans and, accordingly, credit cards.
- Specialization in a certain region. There is such a thing as payment system distribution among users of a particular country or region. This parameter is critical for the speed of transactions and the cost of each transaction. Therefore, it is necessary to know where and which payment system works in the most optimal way.
What Is the Best Payment Solution for Your Startup?
I have highlighted a few key questions that you should decide before you start choosing a payment system for your online business:
- What the mechanics of your future payment system should be. Whether it should support a payment gateway + merchant account separately. Or should it be a combined solution?
- What are the transaction fees of the chosen payment system? What exactly are you paying for?
- Will you have a separate service contract?
- Does the payment service provider have a high reputation?
- Does the payment gateway do what you need it to do?
- Does the payment solution support the payment methods your customers currently use?
- Does the payment system support the currencies your target audience is used to paying in?
- Are there hidden payments?
- Does the payment system offer seamless integration with your online resources?
Thinking carefully about these questions will allow you to make your own choice, which, in the end, should fully meet the needs of your business.
Conclusion
When raising money from outside sources, carefully review the terms of the agreement with the investor. Funding can lead to a loss of control over the company and inconvenience in the management process. The owner and investor may have different opinions on key issues, but under the terms of the agreement, the co-founder’s ideas cannot be disregarded. The risks associated with adding to a startup’s balance sheet are a reasonable price to pay for increasing the scale of operations.
Getting money and growing from a startup to a large corporation is realistic if you approach each stage of financing consciously and know how to manage the money you get.
Add comment