Business.com

---

• Why Small Businesses Need Online Payment Apps
• Everything to Know About Business Checking Account Fees
• Don't Want a VPN? 4 Alternatives to Consider for Your Business

Why Small Businesses Need Online Payment Apps Posted: 24 Feb 2021 07:30 AM PST Cash is no longer king, thanks to the global coronavirus pandemic. Online payment apps and e-commerce are exploding in popularity, requiring small business owners to embrace different payment methods. That's particularly true of businesses forced to shift from an in-person model to an online one during the pandemic. Small businesses that accept online payment apps have tended to fare better than those that don't. "Digital payments have become far more accepted," David Axler, vice president of banking and tax at Wave, told business.com. "It's become a part of our daily routine. Digital payments are making it easier for customers to pay now that there's distance between small businesses and their customers." What are online payment apps? Mobile and online payments are transactions facilitated through a mobile device or the internet. It removes the need to pay with cash or payment cards. Digital payments are also used to send money to friends and family through peer-to-peer payment apps. Online payment apps are essentially digital wallets that securely store the user's credit card or debit card information. The customer either uses the mobile app on their phone or selects that app option on the merchant's website at checkout. What are the pros and cons of payment apps? Before you accept mobile payment or digital payment at your business, you need to consider the good and the bad. After all, these online payment apps are easy to use and convenient, but they aren't void of risk. Here's a look at the pros and cons of accepting online payment apps in transactions with your customers. Pros of online payment apps They're now a widely accepted payment method. Prior to the pandemic, consumers were wary of using an online app or mobile wallet for purchases. Sure, the likes of PayPal and Apple Pay have millions of customers, but digital payment apps hadn't been adopted by the masses. Then the pandemic struck and everything changed. With people stuck at home, e-commerce and online payments exploded. Consumers who previously scoffed at online payment are now using it in droves. According to a recent report by Accenture, by 2023, digital payments will be responsible for close to 420 billion transactions valued at $7 trillion. By 2030, that will increase to $48 trillion. "It speaks to the comfort level of consumers in paying online," Axler said. "It used to be not well understood, not routine." You get paid right away. Unless you're dealing in cash, you may have to wait a few days to get sales from credit and debit card transactions in your bank account. When you accept online payment apps, you get your money right away. You don't have to wait for credit card sales to process or for a customer to respond to an invoice. Since cash flow is an important aspect of running a small business, the sooner you get money in your bank account, the better. They speed up checkout. With e-commerce heating up, merchants have to find various ways to close the sale. After all, shopping cart abandonment is a real problem for all types of online merchants. Accepting online payment apps streamlines the checkout process. The quicker and easier it is to purchase something, the less likely a customer is to abandon their online shopping cart. Also, the quicker the checkout, the higher the customer satisfaction rate. Cons of digital payments There's high potential for fraud. Online payment apps make it easier to purchase goods and services, but that convenience comes with risk. Scammers often target consumers and businesses using online payment apps. One way is through dummy apps that appear in the online app stores. If downloaded, these apps collect a lot of personal information about the user and use it to commit fraud. Encourage your customers to use well-known payment apps that are available straight from their legitimate vendors. They can get pricey to accept. Online payment apps are linked to a user's credit card or debit card. When they use the app to pay you, you'll be charged a transaction fee for credit card payments. The amount you pay depends on the credit card and type of transaction. Card-not-present payments, which is the category online payments fall under, typically cost more for the merchant. Basically, the riskier the payment, the higher rate you pay. "It tends to be the most expensive way to go," said Andi Gray, president of Strategy Leaders. "Business owners really need to know what they need the payment app for." If it's to get paid faster or to lower your number of invoices, she said, you should consider an alternative. If you do accept online payments, she said to get the transaction fee below 3%. They're harder to manage. Online payments might be more convenient for your customers, but they could be much less convenient on your end. Getting all the transactions from disparate payment apps into one accounting system can be cumbersome and time-consuming. "When you start to accept payments electronically, you don't have them tied to a particular invoice or particular receipt," Axler said. However, there is cloud-based accounting software that will automatically gather all your payments under one dashboard to give you a complete view of your sales. What are some of the leading digital payment providers? The online payment market is crowded, with all sorts of companies trying to get in on the shift to a cashless society. But several online payment apps in particular are dominating the market. Apple Pay: Used by roughly 500 million individuals around the world, Apple Pay is among the best-known mobile payment apps. Users input their credit or debit card information into the mobile wallet on their iPhone and can then use Apple Pay in stores and online. Apple Pay uses near-field communication technology, or NFC, to enable contactless payments. There is no fee to accept Apple Pay, but you do pay the transaction fees on credit card and debit card sales. PayPal: With more than 300 million users and 3.7 billion transactions as of the second quarter of 2020, PayPal is a popular online payment app for consumers in the U.S. and abroad. Just like Apple Pay, PayPal is free to use and accept, but you'll pay the normal rates on credit and debit transactions. PayPal also enables businesses to send invoices through its online platform. Cash App: Formerly known as Square, the company's Cash App has more than 30 million active users, 7.5 million of whom use it daily. There are limits on the number of sales you can accept monthly. Venmo: Owned by PayPal, this is a popular peer-to-peer payment app that counts 70 million users. There are no fees to use or accept Venmo; like its parent company, it just charges transaction rates as if the payment were via credit or debit card. You get paid instantly when a customer uses Venmo. Zelle: Owned by 10 banks in the U.S. – including Bank of America, JPMorgan Chase, Wells Fargo, Capital One and U.S. Bank – this online payment app lets you accept payments directly from customers' bank accounts. This removes the need to wait for a check to clear or to collect and deposit cash. Zelle charges you a fee of 2.5% of the transaction amount, with a maximum fee of $15 and a 25-cent minimum. There is no fee to send money with Zelle. Google Pay: Google Pay was rebranded in 2018 and, as of November 2020, has about 100 million users in 30 countries who use it every month. Google Pay works with Android devices and for anyone with a Gmail account. You can also use it to send and receive business invoices. Payments you accept through the app incur the typical rate for card-not-present transactions.

Everything to Know About Business Checking Account Fees Posted: 24 Feb 2021 06:30 AM PST Business checking account fees are part of life for most small business owners, but that doesn't mean you have to accept whatever is thrown your way. There are ways to lower the cost, granted you know what you're being charged for. "There are many different types of fees that come with some business checking accounts," Herman Man, chief product officer at BlueVine, told business.com. "When you first start looking around, you realize everything that can be charged in some cases is." If you aren't careful, business checking fees can eat away at your bottom line and negatively impact cash flow. That's why it pays to do your homework before shopping for a business checking account. Do business checking accounts charge fees? Business checking accounts are more nuanced than individual checking accounts. They tend to face more limitations and incur more fees than consumer accounts. The fees business owners face run the gamut from monthly maintenance to insufficient funds charges. There are also limitations on the number of transactions a business owner can engage in each month. If you exceed it, you're hit with additional fees. Banks do provide ways to get out of the monthly fee – if you maintain a specific account balance or charge a certain amount on the bank's credit or debit card. "It's common for business checking accounts to have fees for services like wire transfers, large numbers of cash deposits, transactions, or monthly service fees," said Michelle Wright, group sales executive at Capital One. "That said, many banks offer easy ways to avoid these fees." There is also a handful of online banks that waive all or most of the fees the traditional banks charge. You give up the human touch with this route, however. What are the types of business checking fees? The business checking fees you're on the hook for depend on the individual bank's terms. As a starting point, though, look out for these common fees: Monthly service fee: This is a fee you're charged monthly to cover the maintenance of your business checking account. It can be $8 to $30 a month. If you meet a certain balance requirement or spend over a specific amount each month on the bank's debit or credit card, this fee is often waived. Some online banks don't charge a monthly fee for their business checking accounts. Transaction limits: Some banks charge business customers a fee for any transactions over a certain limit. The limitations don't end with the number of transactions; some banks require a minimum balance, and some charge a fee if a cash deposit is more than a set dollar amount. Most banks have a limit of 200 transactions per month on their business checking accounts. Some of the no-fee business checking accounts don't place limitations on the number of transactions per month. On the other hand, some allow an even lower number of transactions – roughly 100 – before you incur this fee. Cash deposit fee: Banks set limits on the amount of cash you can deposit each month. If you exceed that amount, they charge you for deposits, usually per $100 deposited above the limit. If you're a cash-heavy business, weigh this fee when shopping for a business checking account. Non-sufficient funds fee: The bank charges you this fee when your checking account doesn't have enough money in it to cover a transaction. The average NSF fee is around $35 per transaction. Wire transfer fees: This is the cost to send money from one bank to another. It ranges from $15 to $25, depending on the bank. How do you avoid business checking fees? Not all business checking account fees are etched in stone. You can use some strategies to avoid many of them. If it's a traditional bank, meeting the balance requirement will typically remove the monthly service fee. The same goes for the transaction fee: If you stay within your limit, you won't face extra charges. That strategy also applies to online banks that set limits on the number of transactions. Your banking needs will determine the best type of account for you, which means you'll need to know how money comes in and out of your business. "As a small business owner, it's important to have a sense of how much money you expect to move through your accounts on a regular basis," Wright said. "That way, you'll be able to choose an account that works best for you. If you're not running a lot of transactions through your business checking account, it may make more sense to choose a basic account, which usually comes with a lower monthly service fee." What are free business checking account options? A popular way to avoid business checking account fees is using an online bank or financial technology startup's platform. Fintech startups have been disrupting all aspects of finances for several years now, and that includes business checking accounts. Aiming to serve the small business community, these fintech companies are slashing fees, lowering requirements, and leveling the playing field for our nation's entrepreneurs. They may not have the deep pockets, extensive relationships, or wide array of services that traditional banks have, but they are applying automation and machine learning to slash costs and improve customer service. These online banks may not appeal to all businesses – after all, they offer no local branches or human interaction – but they are racking up thousands of customers seeking cheaper alternatives. "Businesses shouldn't pay to open a business checking account," said Kathryn Petralia, co-founder and president of Kabbage. "New online-only products eliminate much of the overhead traditional banking accounts require and therefore pass those savings on to customers by eliminating maintenance fees, minimum balance fees, and similar costs. Find a product that supports your growth, not hinders it." [In the market for a business loan to boost your growth? Check out the lenders we recommend first.] With that in mind, here's a list of the more popular free business checking accounts in the market and what they offer. BlueVine offers a business checking account with no monthly, NSF, or incoming wire fees. Customers earn 1% interest on their balance up to $100,000. BlueVine doesn't have any limits on transactions or a minimum balance requirement. Novo offers a business checking account that only charges an NSF fee of $27. Outside of that and a $50 starting balance, there are no fees when you bank with Novo. Axos Bank doesn't charge a monthly maintenance fee, and it offers access to a surcharge-free ATM network and up to 200 free transactions per month. Each transaction after that costs 30 cents per item. Axos Bank requires a $1,000 minimum opening deposit. NBKC Bank has no minimum balance requirement, per-item fees, or NSF fees. The bank charges $5 to send a domestic wire anywhere in the U.S. and $45 to send or receive international wire transfers. At the end of the day, traditional banks and online banks both have their advantages and drawbacks, so it's up to you to choose which is better for your business checking account. Either way, it's important to do your homework, especially on fees, before settling on a business banking partner. "Some people appreciate the in-person relationship with banks, which has become more difficult during the pandemic," Petralia said. "Other business checking accounts are optimized for efficiency online, reducing costs and increasing yields. Every business is different, and preferences vary. But the banking options in 2021 are far different than they were even two or three years ago – I'd encourage all businesses to get to know their options."

Don't Want a VPN? 4 Alternatives to Consider for Your Business Posted: 24 Feb 2021 05:30 AM PST In today's highly-remote business world, online privacy and security have become more important than ever. Since private browsing history is often open to third parties, users can lose their online privacy by simply logging onto the internet. Virtual private networks (VPNs) are a go-to solution for many businesses whose employees access company files away from company servers, especially now that the coronavirus pandemic has forced many businesses to go fully remote. Using a VPN ensures your browsing is secure from hackers or cyberattacks. However, VPNs aren't perfect, and it's important to consider whether an alternative solution might be better for your business. What is a VPN? A VPN facilitates a private network connection by creating an encrypted tunnel between your network and a remote server, masking your identity and location while browsing the internet. If you are connected to Wi-Fi in a public location like a coffee shop, third parties might gain access to your passwords, banking information, credit card numbers, work files and more. Even on a private, secured network (such as your home internet), it's still possible for advertisers, internet service providers, and hackers to view and store your browsing activity. By encrypting your web traffic, a VPN, in theory, ensures that no one else on that network can access your private browser information. [Read related article: VPN and Online Privacy] Drawbacks of VPNs Businesses use VPNs to protect their private data, as they often have employees accessing files while connected to an unsecured network. It's impossible to monitor your employees' every move to ensure they're only using secure connections. However, one wrong move can seriously cost your business. While VPNs can help protect your business's private data, they aren't perfect. Here are some drawbacks to VPNs you'll want to consider. Data cap Depending on the amount of data your business uses daily, a standard VPN service might not meet your needs. Some providers put a limit on data used during VPN browsing. With insufficient data allowances, you'll risk a slower connection and potential vulnerability to attacks while using a VPN. Slower internet connection Because of its encryption, VPNs might slow your internet connection, making it difficult to get work done or attend virtual meetings. If you're located far away from your VPN provider's servers, it can impact your browsing speed. Additionally, a VPN service provider with a limited number of servers may choke browsing speeds if too many users are logged on simultaneously. Security risks The more people who have access to your VPN, the more security risks your company faces, especially if those workers are remote or are connecting to public Wi-Fi. It's important to choose a service that protects your data.            Consumer-focused VPN services typically prioritize getting around location restrictions on certain web content, rather than secure browsing, so you may not get the level of secure access you need as a business with some VPNs. Additionally, some VPNs are not verified and are run by governments or scammers. Do your due diligence to ensure the VPN you are using is trusted and verified by other users. Inflexibility A common issue with VPNs is their inflexibility. Once your VPN network is established (which takes time), it's difficult to change it, especially if you have workers who travel or new employees. Additionally, some services discourage the use of VPNs, blocking users from accessing their site or platform. Costs Effective VPNs can cost a lot of money. Depending on your data volume, some VPNs might be too expensive for your budget. While there are some free options, experts do not recommend them for security purposes. "Although there are many free VPNs available, few of them offer the security and speed of paid VPN software," said Kristen Bolig, founder of SecurityNerd. "Many VPNs put their users at risk. It's crucial that you look for reliable software that ensures you have a safe and anonymous connection." Stagnant technology development VPNs have not evolved in recent years, even during the pandemic. With remote work becoming the new normal, it's important to consider the most progressive options that don't have limited capabilities, like VPNs. Because of the limitations of VPNs, many businesses use different security solutions. With more companies going remote due to the COVID-19 pandemic, business owners are recognizing the need to look into VPN alternatives to keep their data safe. VPN alternatives To ensure the best protection, especially throughout the pandemic and amid the work-from-home culture, consider switching from a VPN to an alternative security solution. Here are some VPN alternatives for your business: Remote desktop connections. There are many remote PC access software programs available that allow businesses to provide secure off-site device access to their employees. Additional benefits include remote technical support, online courses and collaboration. Identity and access management (IAM). An IAM platform establishes and authorizes the identity of individual users. IAM implements a comprehensive verification process through multifactor authentication. You can use this as a VPN alternative or a solution to pair with your VPN. Privileged access management (PAM). While IAM allows for individual access, PAM focuses on privileged credentials, or those who access critical systems and applications. Because of the security risks involved, high-level accounts require more protection and close monitoring. Software-defined perimeter (SDP). Also called the "black cloud," this VPN alternative is based on the "need-to-know access" government model. Any critical files are stored in the black cloud and are inaccessible to regular users, while other aspects of the network are only accessed on a permission basis. I still want a VPN. What do I look for? Patrick Ward, founder of NanoGlobals, noted that speed and security are the most important, differing factors VPNs advertise. "For a business owner, security is primary given that your VPN will be used to protect you while potentially handling sensitive company information," Ward said. "Security protocols, a "kill switch" and DNS leak protection are the three most important security features to evaluate your desired VPN." In addition to these factors, Candace Helton, operations director at Ringspo, advised considering the following elements when choosing a VPN for business: Logging policies. Helton noted that some governments require access to a VPN company's logs, so you may wish to choose a VPN provider that's not legally bound to make this data accessible to the government. On the other hand, if you want to use your data to audit employee activity, Helton recommended choosing a VPN provider that comes with an optional data logging feature. Encryption. Because security is the main priority of VPN services, encryption protocols must be strong to prevent hackers and outsiders from gaining access to your info, said Helton. She recommended choosing VPN providers that offer at least 256-bit AES encryption and ensuring IPSec protocols are not outdated. Versatility. When you're using a VPN for business purposes, you want something that can adapt to your needs, said Helton. "You might want to make certain adjustments to the service in the future, so the VPN provider you choose should be capable of that," she noted. "Before making the final buying decision, make sure to ask expansion-related questions to see if the service can adapt."

You are subscribed to email updates from Business.com. To stop receiving these emails, you may unsubscribe now.	Email delivery powered by Google
Google, 1600 Amphitheatre Parkway, Mountain View, CA 94043, United States