The best payment options for small businesses in the UK

New entrepreneurs have a huge range of choice when it comes to payment options for small businesses.

The large-scale digitisation of payments in recent decades has given merchants a huge array of options when it comes to how you’re going to facilitate transactions at your business. 

It’s important to find a payment method or methods that are not only suited to your unique business model, but able to give your customers an easy and positive payment experience. 

In this guide, we’ll look at some of the most popular payment options for small businesses, how they can benefit various business types, and some of the best practices you can use to manage your business’ payments and cash flow.

Payment options for small businesses: 9 business types

The nuances of various types of business will require a slightly different approach when it comes to finding the best possible payment system.

Your day-to-day operations management, and the demands of your customer base, can call for different features when it comes to choosing a payment option.

Here’s 9 examples of small businesses and the payment options that are best for each scenario.

Cafes and restaurants

Cafes and restaurants are fast-paced environments that attract a wide variety of customers. It’s essential to offer a flexible variety of payment options to accommodate customer preferences.

At a basic level, physical card readers should always be an option for customers to pay in person using credit or debit cards - a common payment method that a large part of your business clientele is likely to use. This payment option is quick, simple, and accommodates customers who are increasingly favouring cashless payments.

If your cafe or restaurant takes advance bookings or offers a catering service, then SumUp POS Lite can also be a helpful way to send digital payment confirmations. 

This payment method allows you to send customers links via email or other online channels, allowing them to confirm and pay for their bookings or orders remotely, ensuring a fast, hassle-free experience.

For some settings in the food service industry, particularly cafes and bars, self-service payment kiosks can also be an excellent addition to the payment experience. Rather than requiring staff to facilitate orders, this tech allows customers to browse your menu, place an order, and pay all from one user-friendly interface using a tablet.

They can also help restaurants collect data on customer preferences and behaviour, which can be used to improve your small business marketing strategy and menu offerings.

If you’re looking for a reliable payment processing solution made for a fast-paced business environment, SumUp’s Point of Sale Pro has a variety of features to help you manage your restaurant or cafe.

Retail

Brick-and-mortar retail businesses can thrive based on their ability to provide fast, hassle-free transactions. Quality card readers can be a great tool in this setting, allowing customers to pay with their preferred debit or credit cards, as well as virtual wallet apps. 

If you’re a retailer who takes custom orders for products, then payment links can also be a useful tool for creating a smooth customer experience. This kind of setup will allow you to discuss the details of the customers’ order over email, and send them a payment link to complete their payment in one quick and easy interaction.

Professional services

For merchants in the professional services industry, it’s essential to have clear and structured payment methods that maintain transparency with clients. 

Creating invoices will give your clientele a detailed breakdown of the services you’re billing them for, and will act as a useful reference for your accounting.

When it comes to payment methods, using a virtual terminal often fits the requirements of professional service providers neatly. This payment tech allows you to take payments over the phone by entering customers’ payment card details into a payment portal.

It can be very useful in professional service business models where you discuss the details of a potential project over the phone and take either a deposit or full payment after confirming a price breakdown.

Consulting

Similarly to professional services, consulting businesses can benefit greatly from using invoices and virtual terminals to provide a fast and seamless payment experience for their customers. 

Sending out invoices allows consultants to keep and share detailed breakdowns of what their services involve and what the client is being charged for each part. This helps to maintain a high degree of transparency and professionalism in their correspondence. With virtual terminals, consultants can confirm the details of a service and facilitate real-time remote payments in one smooth interaction. 

Education

Traditionally, self-employed tutors have relied on a way of working that allows clients to pay in person using cash or card readers. However, facilitating more remote business payment methods can give students greater flexibility and all-around convenience when interacting with your business. 

Payment links, for example, can be a great way to collect fees for advance payments on blocks of lessons, and can be embedded in emails and messaging apps to give students a quick, easy way to settle their bills. 

When it comes to discussing course details and taking card payments over the phone, virtual terminals allow tutors to process transactions without making their customers move to another touchpoint.

Apparel

When running a brick-and-mortar apparel store, physical POS systems are essential, allowing customers to make purchases with their preferred payment card or digital wallet app. However, offering further payment options can enhance the shopping experience for customers who want greater flexibility.

Building an online store will usually come with inbuilt security that will allow your customers to complete their purchases through a straightforward checkout process.

Offering payment links can also be useful for helping customers finalise their online purchases with just a few clicks on their preferred online communication channels.

Beauty and barbers

Barbers, hairdressers, and other businesses in the wider beauty industry, provide markedly personal and tailored services. With this in mind, it's important for these businesses to supply personalised, flexible payment solutions to improve customer satisfaction.

At a basic level, on-premises card readers will allow your clients to pay for their services quickly and easily with credit and debit cards. Payment links are also a good payment option for small businesses in the beauty industry, allowing customers to make payments and confirm their booking through online channels. 

Though less common, some beauty businesses might want to introduce self-service payment kiosks to their premises, as these can provide some extra convenience to customers and take the strain off your staff during busy periods. 

Aside from simplifying the check-in and check-out process for customers, Point of Sale systems can offer a professional feel to your receptionist’s desk when welcoming customers in for their appointments.  

Fitness, wellness, and spas

When it comes to providing the best payment methods for small businesses in the luxury wellness niche, customers will expect to be able to make their payments both at your facility and after making a booking online. 

It’s recommended that fitness instructors take a similar approach as the hair and beauty niche, offering both robust in-person payments through portable card readers and the convenience of online payment links which clients can use to finalise online bookings.

Hospitality

Hospitality businesses have to cater to a diverse variety of guests. To ensure a positive customer experience for all of them, you should look to offer a spread of payment methods that reflect this diversity.

Like any brick-and-mortar business, card readers will be essential, allowing guests to settle bills for their accommodation and other services during the course of their stay. 

It’s also increasingly common to see self-service kiosks used in hotels which allow guests to check in, settle bills at checkout, or make amendments to their stay without having to wait for a member of staff to be available.

With a flexible variety of payment options to accommodate a diverse variety of guests, small hospitality businesses can ensure a quick and easy experience for all their clients.

In-store vs. online payment methods for small business

Perhaps you already maintain a physical and online storefront for your business, or you’re focussing on one side of the business with plans to expand in the future. 

Regardless of the form of your current business, it’s essential to have a good understanding of the different online and in-person payment methods available to small businesses like yours, the costs and benefits associated with each one, and how these details can affect your role as a merchant.

Becoming familiar with each payment method will make it significantly easier to both manage your business’ finances effectively, and provide a positive customer experience that will instil loyalty in your customer base.

Here are some of the major in-store and online small business payment options to investigate as you work to optimise payments at your business.

4 In-store payment methods for small businesses

Facilitating reliable in-store payments is a huge part of providing a positive in-store experience for your customers, and will not only keep your operations moving efficiently, but also have a positive impact on the way your brand is perceived among your target market.

We offer a range of user-friendly payment solutions for small business merchants to maintain fast and hassle-free payments in their premises. 

Here’s 4 of our best payment methods for small businesses to provide efficiency, convenience, and security to their customers.

Card readers

Card readers are a basic payment touchpoint for any business that takes in-person payments. They’re an easy, accessible option for most small merchants, whether that’s from a permanent physical premises or something more temporary like a market stall or food truck. 

Our card readers have a range of features which make setting up and taking payments easy and flexible:

• Device portability via both WiFi and mobile data connections.

• Quick and easy set-up thanks to reliable customer support and a user-friendly interface.

• A variety of payment management functions including creating catalogues and viewing transaction data.

Point of sale (POS) systems

For greater functionality and support with your in-person transactions, our point-of-sale systems can be a useful addition for businesses with a permanent brick-and-mortar premises.

These systems allow you to process payments from credit and debit cards, while also offering a number of auxiliary hardware features that will enhance the sense of professionalism at your brick-and-mortar business and guarantee a smooth in-person payment experience for your customers.

Here’s a simple run-down of our 2 main point of sale systems for small merchants:

Point of Sale Lite

• Includes a SumUp 13” full-HD touchscreen tablet with stand.

• Compatible with the SumUp Solo portable card reader.

• Customised card transaction fees tailored to your business’ turnover.

• An easy purchase process online complete with simple self set-up instructions.

• Customer support available 6 days a week.

• A range of features made to help you facilitate and organise payments, including item catalogue creation, sales performance monitoring, and the ability to accept and manage card, contactless, and cash payments.

Point of Sale Pro

Our Point of Sale pro solution is one of our more popular POS options, offering everything that comes with Point of Sale Lite as well as several additional features for better payment processing and financial management:

• POS software that can be used on any iPad, allowing you to integrate your POS with your business’ existing hardware.

• Compatible with any SumUp card reader, as well as card readers from certain other providers.

• A selection of helpful hardware add-ons, such as a receipt printer, barcode scanner, tablet stand, and cash drawer.

• A guided purchase process where a member of our team will help you onboard your POS tech in a way that suits your business.

• Expert support available 7 days a week.

• Useful software features including table management, multiple location management, the ability to process gift cards and vouchers, and advanced reporting.

Self-service kiosks

Self-service kiosks are a modern staple of several different industries including bars and restaurants, hospitality, retail, and much more. 

By utilising this payment method, merchants can cut down on queues at their premises for more efficient customer service. It also allows you to free up staff, and customise a self-service ordering experience that reflects your brand values.

Some of the features that merchants can take advantage of using self-service kiosks include:

• Customisation and branding options that allow you to edit the colours, visual elements, and text on your menus to match your business’ branding.

• Advanced layout configuration that can be tailored to your business’ offerings. This can be useful when deciding how to price a product and creating different price lists for different purchase types (e.g eat-in vs takeaway), scheduling special promotional menus, or changing the layout of menus depending on the time of day.

• Upselling options which automatically suggest complimentary items to your customers, which they can add to the basket quickly and easily on their way to the checkout page.

Digital receipt options which allow your customers to send receipts to their personal device, helping your business work towards becoming paperless.

3 Online payment methods for small businesses

Maintaining an array of online payment methods will give your customers advanced flexibility in the way they interact with your business through online channels, and ensure a positive customer experience no matter how people discover your brand.

There are many online payment methods available to entrepreneurs, all of them with their own unique features that can make them well-suited to different niches, business sizes.

Here are 3 of the popular online payment methods we offer at SumUp, their key features, and how they can be integrated with your business model.

Payment gateways (Online store)

In the context of e-commerce, payment gateways are online portals used on online stores that allow merchants to receive debit and credit card payments from their customers. 

This is one of the most widely-used online business payment methods on the market, and is facilitated as a basic feature by the majority of payment providers with online store building tools. 

Once a customer has added items to their cart, selected a service to book, or specified a product or service in some other way, they’ll come to the payment gateway where they can enter their card details and complete the purchase.

Our online store service gives you an intuitive platform you can use to build a professional online store, including secure online payments through the e-commerce payment gateways your customers are used to. 

Our online store tool also gives you access to a range of other useful features, including:

• Simple inventory management.

• Unlimited items.

• Connection with your physical point of sale tech.

• Customer order notifications.

Payment links

Payment links are hyperlinks that you can generate using tools facilitated by your payment provider. 

You can share these links in the same way you would with any other hyperlink, whether that’s through email, text, or other messaging apps. Once the customer receives the link for an outstanding payment, they can click it to go to a payment gateway similar to those used on e-commerce stores, where they can then enter their card info and authorise the payment to the merchant.

This payment method can lend itself well to a variety of business models. Freelancers, for example, can use payment links to take deposits or full payments for their projects in the same chain of emails or texts where they’ve discussed the project’s particulars with their clients. This way, both the client and freelancer can keep the project details and a breakdown of pricing in one place for quick and easy reference.

Invoices

In the most basic sense, invoices are documents listing products or services that have been provided by a business, along with a price breakdown for those products or services. 

In recent years, however, there’s been an increasing use of digital invoices that come with integrated payments as standard. This allows clients or customers to review the pricing for goods or services, and pay the invoice in a single easy interaction.

We offer easy-to-use invoicing software that connects with your SumUp dashboard and uses data from your unique quotes to create an invoice instantly, which you can then send to your clientele through either email or a payment link in your preferred messaging channel.

When the client receives the invoice, they’ll be able to pay it quickly and easily simply by clicking a pay now button, which will be automatically included in the invoice email.

How to manage money as a small business

Setting up the right offline and online payment options as a small merchant is just one part of the larger issue of effective cash flow management.

Small business finance management is a broad topic. For now, here are some of the most crucial tips for managing money as a small business owner:

Find a reliable business bank account

When merchants are first starting a business, perhaps by developing a side hustle alongside regular full-time work, it’s common for them to receive payments into their personal bank account.

While there’s nothing wrong with this when you’re first starting your business, entrepreneurs should eventually look to opening a business account and taking advantage of various benefits, including:

• Integrated business tools which make it easier to categorise transactions, account for business expenses, create invoices, etc.

• A business account that’s designed for handling large, commercial transactions, which can be useful as you scale in the future.

• An account that’s separate from your personal finances and allows you to build your business credit rating based on your business’ performance, rather than your personal circumstances.It helps to promote a more professional image to other businesses, which can help you forge better relationships with clients and customers.

• It helps to promote a more professional image to other businesses, which can help you forge better relationships with clients and customers.

Monitor spending closely

Between inventory, marketing, software subscriptions, and more, there’s a broad range of small business expenses that can go into keeping you afloat. 

If you don’t have a clear idea of the money you spend in a week, month, or a year, you can be in danger of racking up unnecessary expenses.

If your business finances are spread over multiple bank accounts and payment cards, it's a good idea to think about consolidating these into one dedicated account. 

By doing this, you’ll make it easier to keep track of small expenses and cash flow.

Schedule your purchases

Effectively timing investment in your operation can be difficult in those early periods of rapid business growth. However, it’s essential to think about the way you’re scheduling purchases to avoid a low or negative cash flow.

Going back to our previous point, scheduling your purchases in a smart way means having a clear understanding of all of your business’ outgoings, both fixed and variable, and ensuring these are paid before you make any further purchases that aren’t absolutely essential.

The discipline and foresight required to schedule purchases effectively will take some time to develop as you learn more about your business’ cash flow, payment terms and the challenges of your industry. 

Making this a priority will help you create internal processes to ensure you stay on top of business expenses and avoid cash flow deficits.

Have an emergency fund

Taking a proactive role in managing your business’ finances can certainly help maintain a healthy cash flow. However, unexpected expenses can still pop up for a range of reasons and leave you scrambling to find the liquid capital to cover them.

It’s important to maintain an emergency cash cushion in a business bank account to help you cover unexpected financial challenges if and when they arise. 

Though you may never need it, having this emergency fund can potentially mean the difference between the long-term success or failure of your business.

Disclaimer: The contents of this page are intended for informational purposes only and should not be construed as professional advice. For matters requiring legal or financial expertise, it’s recommended to seek guidance from qualified professionals.