Starting your Side Hustle Part 3: Make it Easy to get Paid

Perhaps the most important step in starting your business is making sure it’s easy to get paid. In the past, simple cash payments with proper invoicing and receipts were sufficient for most businesses. However, in the digital age, it is important to have yourself setup to receive payments online in a quick, efficient and secure manner.

Payment Gateway v. Direct Transfer

You may decide to have your clients and customers transfer money directly to your accounts. Some banks have transfer mechanisms setup whereby clients can send money to your email address or phone number. This can be quick and easy. However, the downside is that you will have to accept money in advance, if you want to be assured that you will receive funds. This may cause a conflict with your new clients, as they may not be willing to part with their money before seeing the end product. You could write up a contract with the client, and agree to take money at the end of the work/sale, however there will always be a risk of non-payment.

Clients may be more comfortable paying over a payment gateway. There are many available, but famous examples include PayPal or Stripe. These payment gateways can be easily integrated on your website or web page, meaning that your clients will be able to pay you by clicking a button or accessing a link through your website, which will be setup to route credit card payments made via the site/page, to your account with the payment gateway directly. Once the funds are in your account, you can then transfer them to your bank via the payment gateway.

The benefit of using a payment gateway is that you can strike a balance between client and supplier security quite nicely. PayPal has a complaints and dispute resolution procedure, whereby any non-delivery of goods or services can be reported to their complaints department. Once reported, it will be thoroughly investigated by their complaints team, who will ask both the supplier and the customer about their experience. If the supplier fails to respond or provide adequate justification for their charges, then PayPal will automatically refund the amount to the customer’s PayPal account, and the supplier’s account could be suspended or put on hold. These steps can be very tough for businesses, and therefore businesses invoicing over PayPal will be more careful in avoiding false charges. There are also a number of escrow services available online, which can offer both buyer and seller security.

Using these gateways can help ensure you get paid, while also leaving your customer with a feeling of security.

Using a Payment Gateway as a Business

You may be able to use a payment gateway as an individual, but it is recommended that you try and open a business, or at least obtain a sole proprietorship trade license (in your home country for example), before starting your account. Payment gateways have strict money laundering compliance requirements, and account opening is usually heavily tied to geographical location. That being said, you don’t have to be located in the same country as your payment gateway account. You can work from the caribbean while using a UK based PayPal account, if you take the right steps and setup a company in the UK. There are a number of ways to manage the process of opening a company or obtaining a trade license, which can make your registration with a payment gateway (and the acquisition of an account) much easier. Some of these processes can be complex, and therefore you may need professional assistance structuring your ecommerce business and passing due diligence (from banks and payment gateways).

For such assistance, get in touch with us today at info@borderlesscounsel.com!