As a signal provider, you may not expect your client trader to travel miles, ringing your doorbell to hand you a bunch of cash for their investment (if there is ever any enthusiast willing to do so). Then, as any brisk business working in the 21st century, you may want to think about the optimal payment method for both yourselves and your clients - bank transfer, digital wallet, payment gateway or debit/credit card and you name it. But before you find out the most relevant solution let’s look at the biggest pros and cons of the most popular payment options.
Hosted payment gateway
Hosted payment gateways essentially direct buyers away from your website to a secure hosted payment processor to finalize checkout and payment made by a credit card, debit card or ACH transfer. Simply put, it is a middleman between you and your clients, ensuring the transaction is carried out securely and promptly.
Security:Sure, bearing little risk is what makes payment gateways superior to any other payment method as the gateways are often provided by a bank or by a specialized financial service provider as a separate service, such as Melio, Fondy or Blue Snap.
Flexible transactions and billing:Many hosted payment gateways accommodate transactions in multiple currencies and offer recurring billing for specific vendors, they can provide invoicing efficiencies and increase the breadth of clients that businesses are equipped to sell to and serve, while eliminating the need for manual currency calculations.
Complicated integration: Heard about the pain of developing a business website in our last blog post? Not to dampen your spirit, but if you are into accommodating a hosted payment gateway, prepare for another pain. It means making yourself familiar with SSL encryption, PCI DSS compliance obligations, transaction process, plus terms and conditions, plus transactions type, plus working with the web developer for its display, plus, plus…
Limited control:Sending the money back and forth through a third-party website
International bank to bank wire transfer
A wire transfer is when money is transferred electronically from one place to another, usually through a money transfer service like Western Union, MoneyGram, and Xoom. Just like any other payment method you will see many advantages of wire transfers while some disadvantages can trigger your second thought.
Easy access:Wire transfer services are found all over the world. This means you can send and receive money from anywhere. You can just send the money from your sofa while playing PS5. All is online.
Real-time transaction: Wired money is sent and received with almost no delay. Unlike sending money through bank deposit, there is a clearing period of a couple of days depending on the bank policy.
Global service:You and your client don’t have to go far to receive the wire transfer. Global wire transfer services have many branches where one can go to collect money. Some wire transfer centers are also tied up with various banks.
Safety:Generally, it is safe to do wire transfers. There are regulations for international wire transfers that all wire transfer services follow. You can thus be sure that safety procedures are being practiced so your money can safely reach its beneficiary.
Fees:The most unpalatable
No return:Once a transfer is made, it’s nonreversible. The sender will not be able to get the money back in case he changes his mind. Sounds like this is the choice for steady traders only, isn’t it?
Scammers’ tool:Because transfers can be made anonymously and only transaction codes or tracking numbers are required to claim the money, money wire transfer is very attractive to scammers.
Now almost all consumers own at least one card and their use is highly trusted. Advantages of these card is obvious, but a few inconveniences should not be omitted:
Popularity:Credit cards are one of the most widely used methods of payment. Several studies claim that nearly a half of online payers are seeing cards as their preferred method.
Fast transfer:Few ecommerce payment processors are as fast as ones that accept cards. Offering speedy, efficient methods to pay increases your investor trust and also gives them less time to change their minds.
Convenience:Cards are so easy to use that many are now almost making their payment on impulse.
Boundary-free transfer:Cards can be used to transfer money almost all around the world. Other payment processors may have geographic restrictions regarding who can use them.
Merchant fees:Many credit card processors charge merchants fees in order to use their service. The fees can increase over time.
Security risk:Credit card numbers are unfortunately easy to steal. This increases the risk of fraud that can harm your business, especially if a card service doesn’t constantly monitor for potentially fraudulent activities.
Dispute:If a client trader disputes a transaction, the credit card processor you use can issue a refund on their behalf. They may also issue you a chargeback fee, which results in you losing money.
Bookkeeping cost: Additional bookkeeping may be required for businesses who accept credit card payments. This could end up costing you extra time and money.
Not necessarily that you run an online business, you might use or at least hear about PayPal if you ever make any payment on the internet. Now roughly 17 million merchants across the globe are having their transaction carried out through the platform. Many have their points to choose PayPal but also to hesitate to go for it.
All-in-one solution:PayPal allows customers to pay using a variety of methods, including credit cards, Debit cards, and even e-cheques. The service essentially functions as an online wallet.
Wide coverage:The service is available in a variety of countries, allowing the majority of businesses to make use of it.
Preferential fee:Depending on the account you choose to use, you may not need to pay a monthly fee.
Suspension:One of the most seen complaints about PayPal is the random fund freezing, minimum a few days but rarely more than, errrrr, 6 months. And this often happens to the personal account holders who receive an abnormally large amount of money in their account that is way above their average. As a signal provider, you should expect that the transaction amount may run hot and cold very often.
* Hot tip: Start out with a PayPal business account to minimize the risk of account freeze.
Veteran (and some heartbroken) PayPal users insist that while you can significantly save cost at the beginning with a personal account, making high value transactions, which is inevitable in doing business, exposes your account to being flagged by PayPal as potential fraud. Your account may be blocked until your legal entity is fully authenticated. Expect loads of paperwork, frustrating verification process and loss of opportunities before your recovered account is required to change to a business one. What a shame!
Fee:PayPal takes a small portion of your transaction as payment. The higher your pay, the more the service takes. It turns out to be significant amounts if your transaction is large. And who knows, someday you have to deal with a dozen thousands of dollars transferred from a client. The fees might be from 1.9 to 2.9 percent. Plus $0.30 per transaction.
Dispute-caused blockade:If a client trader disputes a payment, PayPal can actually take over your account until the dispute is resolved. This means you are subject to account suspension at any time which can result in frozen funds for months. You also cannot appeal a decision made by PayPal over a dispute.
Cryptocurrency such as Bitcoin is still a relatively new method of paying online and it has yet to find widespread popularity. If you are no expert to it but still keen on this promising payment form, then, trust me, find a pundit and have these in mind:
Cost- effectiveness: In many cases, the use of cryptocurrency for online purchases is a cost-effective alternative for web stores that don’t want to pay the fees of other common payment processors.
Speedy transaction:Cryptocurrency is actually often a faster way to complete a transaction than credit cards are (because there is no need for banks to verify credentials).
Niche market:In general, the ability to pay with cryptocurrency appeals to a niche audience. If you’re hoping to target that client group, adding this payment option can help.
Instability:Cryptocurrency is far from a stable currency. Prices can fluctuate quickly and drastically, with little warning. These changes may negatively impact your business or your clients.
Small scale:The portion of people actually selecting this option to pay with is likely to be small. The hassle of setting up crypto payments may not be worth the reward.
Legal risk:Cryptocurrency burst onto the scene rather quickly and left lawmakers scrambling to keep up with this new type of currency. There is still a lot of ambiguity surrounding the laws that relate to cryptocurrency which could inadvertently impact your business negatively, without even realizing it.
A relevant combination of payment methods should deliver the best client experience and efficiency for your business. Don’t be discouraged by the long-winded how-to guides on payment methods. Delve into it today, your pains have to pay off!
How about just focus on your job as a signal provider, give all the dreaded and dumb stuff concerning payment to TikTik. The platform boasts an optimal amalgam of payment solutions meticulously tailored to signal providing business and importantly, well in place for you. Wanna pay and receive via a hosted gateway, PayPal or Cryptocurrency? TikTik has it all to offer.