You Have More Payment Options Than You Think
When you start a small business, figuring out how to actually collect money feels weirdly complicated. Should you get a card reader? Can you just use Venmo? What about checks — do people still write those?
The answer is that there's no single best payment method. The right mix depends on whether you sell in person or online, how much your average order is, and what your customers prefer. Here's a straightforward breakdown of every common option, what each one actually costs, and when to use it.
Cash
Cash is the original payment method, and it still works perfectly well for certain businesses.
Fees: Zero. No processing fees, no transaction costs, no monthly charges.
Pros:
- You get the full amount immediately
- No equipment or accounts needed
- Works great at farmers markets, craft fairs, and local pickup
- No chargebacks or payment disputes
Cons:
- You need to make change, which means keeping cash on hand
- No automatic record of the transaction — you have to track it yourself
- Risk of theft or loss
- Doesn't work for online orders or shipping
- Some customers simply do not carry cash anymore
Cash works best as a secondary option alongside digital payments. If you sell at markets or do local pickups, always accept cash. Just make sure you're recording every cash transaction for your books.
Venmo
Venmo is massively popular for small, informal transactions. A lot of small business owners start here because it's what they already use personally.
Fees: Venmo for Business charges 1.9% + $0.10 per transaction. Personal Venmo accounts technically aren't supposed to be used for business transactions, and Venmo can freeze your account if they catch it.
Pros:
- Most people under 40 already have Venmo
- Instant transfers available (for a fee) or free 1-3 day transfers
- Easy to set up a business profile
- Customers can pay with just your username
Cons:
- Business transactions are public by default (you can change this)
- No invoicing features built in
- Limited buyer/seller protection compared to PayPal
- $25,000 weekly sending limit for business profiles
- Looks less professional than a dedicated payment processor
Venmo works well for casual, local businesses — someone selling baked goods to neighbors, a plant seller doing porch pickups, a crafter taking custom orders through Instagram. Once you're doing consistent volume or selling to businesses, you'll want something more robust.
Zelle
Zelle is built into most major bank apps, which makes it convenient for bank-to-bank transfers.
Fees: Zero. Zelle doesn't charge any fees to send or receive money.
Cons:
- No buyer or seller protection — once money is sent, it's sent
- No invoicing, no receipts, no transaction management
- Limits vary by bank (typically $500 to $5,000 per day for sending)
- Can't accept payments from people who don't have a Zelle-connected bank
- No business-specific features
Zelle is best for repeat customers you already have a relationship with. It's essentially a free wire transfer. The lack of any protection means you shouldn't use it with strangers or for large orders from new customers. If someone pays you via Zelle, the money lands in your bank account within minutes. That's the entire upside — and for a lot of small transactions, that's enough.
PayPal
PayPal has been around since the early 2000s and is still one of the most widely accepted online payment methods globally.
Fees: 2.99% + $0.49 per transaction for standard commercial payments. PayPal invoicing charges 3.49% + $0.49. International transactions add a currency conversion fee.
Pros:
- Trusted brand — many customers feel safer paying through PayPal
- Built-in invoicing with payment tracking
- Buyer and seller protection for eligible transactions
- Works internationally
- Customers don't need a PayPal account (can pay with card through PayPal checkout)
Cons:
- Fees are on the higher end
- Account freezes and holds are common, especially for new accounts or sudden spikes in volume
- Customer service is notoriously difficult to deal with
- Chargeback process can be frustrating
- Holds funds for up to 21 days on new accounts
PayPal is a solid option for online sales, especially if you sell to customers who are wary of entering their card information directly on small business websites. The invoicing feature is functional, though the fees eat into margins on smaller orders. A $30 sale through PayPal invoicing costs you about $1.54 in fees.
Square
Square is the go-to for in-person card payments and has expanded into a full payment ecosystem.
Fees: 2.6% + $0.10 for in-person tap/dip/swipe. 2.9% + $0.30 for online transactions. 3.5% + $0.15 for manually keyed-in card numbers. Square invoicing charges 3.3% + $0.30.
Pros:
- Free card reader (basic magstripe reader, or ~$59 for a contactless/chip reader)
- No monthly fees on the basic plan
- Built-in POS system with inventory tracking
- Professional invoicing
- Next-business-day deposits (or instant for a fee)
- Handles tips, receipts, and refunds
Cons:
- Fees add up on small transactions
- Account stability issues — Square can hold or freeze funds if they flag your account
- Advanced features require paid plans ($29+/month)
- Keyed-in transactions cost significantly more
Square is probably the best all-around option for small businesses that sell both in-person and online. The free card reader alone is worth it for markets, fairs, and pop-up events. A $50 in-person sale costs you $1.40 in fees. That's reasonable.
Checks
Checks feel old-fashioned, but they're still common in certain industries, especially B2B transactions.
Fees: Free to deposit via mobile banking apps. No processing fees.
Pros:
- No transaction fees
- Creates a paper trail automatically
- Common for wholesale orders, contractor work, and B2B
- Some older customers prefer writing checks
Cons:
- Checks can bounce
- Slow — takes 1-5 business days to clear
- Requires a trip to the bank (or mobile deposit, which has daily limits)
- You're waiting on mail if the customer isn't local
- Fraud risk with counterfeit checks
Accept checks if your customers want to write them. Don't ship products until the check clears. For wholesale accounts and larger B2B orders, checks are actually preferred because neither party pays processing fees on a $2,000 order.
Bank Transfers (ACH)
ACH (Automated Clearing House) transfers are direct bank-to-bank payments. They're what happens behind the scenes when you set up a direct deposit or pay a bill online.
Fees: Varies by provider. Stripe charges 0.8% (capped at $5). Square charges 1%. Some banks offer free ACH transfers between business accounts.
Pros:
- Much lower fees than card processing
- Good for large transactions (wholesale, B2B)
- No chargeback risk in the traditional sense
- Can set up recurring payments
Cons:
- Takes 3-5 business days to settle
- Customers need your bank routing and account numbers (or you need a payment processor)
- Not practical for small, one-off consumer purchases
- Returns (failed transfers) can happen days later
ACH is best for businesses with repeat clients placing larger orders. If you wholesale products to stores and they're ordering $500+ regularly, ACH saves both of you significant money compared to card processing.
Which Methods Should You Offer?
You don't need to offer every payment option. You need to cover the situations your customers are actually in.
If you sell at markets or in person: Square (card reader) + cash + Venmo. This covers almost everyone.
If you sell online and ship: Square or Stripe (card processing) + PayPal. Give customers the option to pay by card directly or through PayPal.
If you do local pickup/delivery: Venmo + Zelle + cash + card (Square). Local customers tend to prefer quick, informal payment methods.
If you sell wholesale or B2B: ACH + checks + card as a backup. Lower fees matter more on large orders.
How to List Payment Methods on Your Invoices
Whatever methods you accept, make them crystal clear on every invoice. Your customer shouldn't have to guess how to pay you. Include a section near the bottom of your invoice that lists each accepted method with the specific details they need:
- Venmo: Your Venmo handle (e.g., @YourBusiness)
- Zelle: The email or phone number linked to your Zelle
- PayPal: Your PayPal email address or a PayPal.me link
- Check: Who to make the check payable to and where to mail it
- Card: A link to your online payment page, or "card accepted at pickup"
If you use invoicing software like OrderHelm, you can set your accepted payment methods once and they'll appear on every invoice automatically. That saves you from retyping Venmo handles and PayPal links every time.
A Quick Note on Fees and Taxes
Processing fees are a business expense. You can deduct them on your taxes. Track them carefully throughout the year — they add up faster than you'd expect. A business doing $50,000 in annual revenue through Square is paying roughly $1,300 to $1,500 in processing fees. That's real money, and it's fully deductible.
Don't pass processing fees directly to customers as a surcharge. It's legal in most states, but it feels nickel-and-dime and pushes customers away. Instead, factor the average processing cost into your pricing. If you know you'll pay about 3% in fees on average, build that into your product prices from the start.