It wasn’t that long ago, probably just over a decade, when I last told a business that the “check was in the mail.” That was always the way to send a business money.
To be honest, I can’t even think of the last time I wrote a check. And, why would I? We live in a world where I can pay someone just by clicking a button on my phone.
But, while there are several ways to pay your friends and family for rent, dinner, etc. for free, the options for doing so with businesses aren’t as plentiful. And, that can be a concern when money is tight for both you and the business.
Thankfully, there are ways to send a business money for free – or at least incredibly cheap – such as these eight examples.
1. Accept eChecks Through ACH Processing
One of the most popular ways to send and receive money is through a direct debit of a bank account with an eCheck, or electronic check. Instead of physically writing and sending a paper check, you would input that same information found on your paper check (routing and account number, name, amount, and authorization) in an online payment form or software interface. The payment is processed electronically – which means that it’s secure, lightning fast, and dirt cheap.
ACH processing is governed by the National Automated Clearing House Association and if there are transaction fees involved, they’re typically much lower than credit cards. NerdWallet has a list of transfer fees that banks may charge for ACH transfer. Most banks and credit unions – Ally, Barclays, Chase, Nationwide, and USAA, for example – don’t charge for external transfers
2. Use Mobile Payment Apps
Since smartphone ownership is continuing to rapidly grow – 77% of Americans alone own a smartphone – it only makes sense that businesses would jump onboard the bandwagon and start accepting payments via mobile apps. Additionally, paying through apps is fast, convenient, and safe for both businesses and customers.
Most mobile payment apps, such as Flint, Square, Stripe, PayPal, and Intuit Go, all charge fees that are around 2.7% for swiped transactions or 2.9% + .30¢ for scan or key entry, online sales, and invoice payments.
3. Join the Digital Wallet Revolution
Digital wallets, like mobile apps, are also gaining popularity among both businesses and customers. Besides providing another way to send money quickly, securely, and cheaply, digital wallets can also store additional information like loyalty rewards, gift cards, tickets, and even identification.
The good news is that digital wallets are free to use and transfer money to other parties. For example, Google Wallet, which is linked to debit card or bank account, allows you to send money to anyone through their email address or phone number for free.
Due is a digital wallet that’s also free and can transfer money in as little as one business day. For credit card payments, Due charges a low 2.8%.
4. Become a Social Butterfly
Social media platforms like Facebook and Snapchat can now be used to transfer money between two different parties. With Facebook, for example, you can transfer funds through Messenger for free just by clicking the dollar sign symbol, selecting “Next” to enter your debit card information, and clicking “Pay.”
The recipient must also add a debit card to access the money, which can take up to three days to become available. Facebook claims this is only for person-to-person transfers, but you could probably get around this if you’re a solopreneur or extremely small business.
However, Facebook is gradually rolling out the option for businesses to set up payments on their shop section by teaming up with PayPal and Stripe. There will be 2.9% of the purchase price + 30 cents per successful charge.
5. Look For P2P Payment Options
Peer-to-peer, or person-to-person (P2P), payments are all the rage thanks to services like Venmo, Square Cash, and PayPal. The problem is that to transfer funds for free it has to be for personal use.
The good news? There’s a strong probability that your bank offers a person-to-person (P2P) payment service. Even better? At some banks, those payments are free – or least a low fee of around $1.
Since each bank uses a unique name for these services, look for an option like “send money to a friend, or something similar.” Other institutions, such as Bank of America, Citibank, JPMorgan Chase and Wells Fargo use a third-party service like Popmoney or Zelle.
Another P2P option for businesses is Dwolla.
Dwolla directly transfer money from your bank account into that of your recipient’s via Dwolla ID, email address or phone number by using the ACH architecture. The service is free to use, but for merchants who are in need of additional features, Dwolla offers a Plus plan at $25 per month, Premium plan at $250 per month, and Custom plan at $1,500 per month.
6. Get on the Blockchain
Have you heard of cryptocurrencies like bitcoin? It was built using blockchain technology.
The blockchain can get technical, but in it’s most basic form, it’s the distributed encryption system that makes digital currencies possible. This means that it’s one of the most secure payment options available. And, because it’s not regulated, it’s free and funds can be available almost instantly.
7. Click-to-Pay-Invoicing/Recurring Billing
The days of opening a bill in the mail, writing a check, and sending it back are over. Now you can receive an invoice via email and then make a payment with just one-click through a web portal. Another option is recurring billing where a business automatically charges your credit card or bank account a specific amount of money on a specific date each money.
In either case, you’re not charged additional fees – no matter how you pay. However, the business may have to take care of a fee, like 2.9% + 30¢ per invoice paid online, depending on the invoicing service that they use or how they’ve processed the payment.
8. Cold, Hard Cash
Cash may not seem as sexy as the options listed above. But, it remains a popular form of payment. In fact, a 2016 Total System Services, Inc. Consumer Payment Study found that cash is preferred for payments between individuals. Even more surprising is that it’s the favorite payment method of 18 percent of individuals between the ages of 18 and 24 and 17 percent of those between 55 and 64.
And, it’s 100% free and one of the best ways to send a business money. No exceptions.