The bank transfer is far from being the most widespread payment since it represents only 5% of online transactions. However, it is a must for traders who specialize in selling to professionals. The principle: you issue an invoice containing your bank information, then send it to your buyer to pay the amount.
The Advantages Of Bank Transfer:
Absence of transaction fees (on domestic and European payments): unless the transfer is issued outside the European Union, you will not have any commissions charged. A significant advantage, especially since the sums that pass-through bank transfers are generally substantial.
Limited failure rate: since the transfer is made directly from one bank account to another, the failure rates are relatively low.
High spending limits: depending on the bank, the maximum transfer amount is between €3,000 and €50,000. It is, therefore, higher than the means of payment we have seen previously.
The Inconvenient:
Unpaid and late payments: one in two SMEs is the victim of late payments in France, and one in five companies declares more than 5% of its turnover is unpaid. The heaviness of the transfer favors late payments, even unpaid invoices, which can negatively impact your cash flow.
Customer experience: while payment by credit card with E-Complish for example is simple and fast, the transfer imposes a more complex procedure on your buyer. In addition, the fact of having to remind him regularly so that he pays you can taint your relations.
For your recurring invoices, consider direct debit, which allows you to initiate a payment without your customer having to take any particular action for each due date. However, it requires the establishment of a SEPA direct debit mandate.
The Check: Payment By Check
In recent years, the use of checks has declined in favor of electronic means of payment: However, payment by check continues, especially for purchases in the health field.
The Advantages Of The Check:
Absence of transaction costs: just like the transfer, you have no commissions levied on your payments collected by check.
No spending limit: there is no maximum amount for issuing a bank cheque. The only condition is that the provision on the debtor’s account is sufficient.
The Inconvenient:
High risk of fraud: although its use is declining, checks have become France’s most fraudulent means of payment. The scam in this area increased by 20% between 2018 and 2019, so checks now represent 46% of total payment fraud.
Lack of practicality: although suitable for in-store purchases, checks are not the most practical means of payment for online orders. Your buyer must have a checkbook available and send his payment by post, which lengthens your collection time. Learn more about Workers’ Message to Employers: Pay Up Now here.