Why it’s important to consider your payment methods to suppliers

I have a confession to make…

I downloaded a new app to my iPhone this week – it’s called ‘TimeHop’. You may have heard of it already but basically it’s an app that delves into your past via social media sites such as Twitter and Facebook and delivers a daily message to you which shows you your posts from 1 year ago, 2 years, 3 years and so on. So you can see and remember exactly what you were doing at this exact time in the past!

I’ve found this really quite interesting because you do tend to forget about some of the things you’ve done that may not have seemed significant at the time – but when you look back, depending on what it was you’ve been reminded of, you think either ‘Crikey was that really 5 years ago!’ Or ‘Why the hell did I do that?’ Or ‘Awww, that was a lovely time’.

And it’s this TimeHop app that has prompted my confession to you today because I saw a post in one of my daily TimeHop emails that reminded me of something very, very, very stupid I did in the past!

First, let me set the scene! Not that long ago there was a huge fear of buying anything online. We were all concerned that our money would be stolen electronically, that our credit card details would be cloned and that the whole world of the web was simply completely unsafe for any sort of financial transaction. Yet here we are just a few years later, and now not only are we quite comfortable saving our credit card details on websites to allow for easy one click purchasing, but we manage our banking on the internet, sometimes even on a mobile phone!

So, my confession relates to that time when paying for goods online was not quite so blasé as it is now.

Around 9 years ago when I was a newbie online seller, so great was my fear of paying for goods via an online method, that I chose to send a payment to China via…Western Union. I know, I know. I can hear your gasps from here. I know I was stupid – but I didn’t realize it back then. The worst thing is that I didn’t just do it once – but twice. Of all the payment methods I could have chosen, I chose the dodgiest one of the lot – what was I thinking?

Well I obviously wasn’t thinking – or perhaps I was thinking I knew best! I do remember though that my heart was hammering when I walked into the tiny store, filled in the forms and handed over the money to a random man stood behind the counter – yes I actually did that! But even then I didn’t actually think – this is stupid, so convinced was I that this was far safer a transaction than doing it online!

Now, fortunately for me both transactions were fine and I received my goods – but I was lucky because it could so easily have gone pear-shaped and this reminded me to remind you that one very important thing you should always consider when purchasing stock from a wholesale supplier is a safe and secure payment method.

As I said, I think we’ve all become a little bit blasé when it comes to our financial details – and that can be absolutely fine when dealing with small amounts on our relatively secure UK internet connections. But when sending serious amounts of money, particularly overseas, you need to think very carefully about ensuring that your money is received safely and securely and in exchange for your goods.

When dealing with suppliers in the UK who you can actually visit and pay for goods using a debit card, cash or cheque and then literally take the goods away with you, it’s not such a problem, but when doing business with overseas suppliers you should spare a moment to consider the payment methods available to you.

Is it a secure payment method?

Credit Card – Yes! Some methods of payment are far more secure than others. Credit cards, for example, are a far better means of making payment than debit cards as they offer more protection for buyers, and you’ll be able to get your money back should the deal go sour and no stock ever be received.

Occasionally you may have to pay a bit more money to use a credit card, sometimes a percentage of the final fee, but this fee can be worth it for the peace of mind of knowing that you may be able to get your money back if necessary.

PayPal – Yes! Another option that you might wish to consider is that of PayPal. Once again, PayPal offers some protection should anything go wrong, allowing you to claim a refund. You’ll need to set up the account with a credit card though, and make sure you’re using that to make your payments.

Escrow – Yes! Consider this website as a kind of holding room for your money. As soon as the deal is agreed you pay your money into the account of the supplier, only they are unable to access it immediately. It is not until the goods are safely received and you have marked them as so within the website that your money is released to the supplier. If the goods are never received then you can claim a refund through the Escrow.com website.

And some to avoid…!

Direct bank transfers or telegraphic transfers (T/T) as they are sometimes known have very little protection. Suppliers may favour this method of payment as it means a more instant receipt of money for them, however it is something that you shouldn’t consider until you have established a good working relationship together. The same goes for Western Union and Money Gram. These offer absolutely no protection for you at all so please don’t make the same mistake as me. Instead – avoid these!

Some suppliers may try to bully you into using the payment method that they prefer, even if it isn’t as secure, but do stand your ground and go for the option that suits you the best and gives you protection. The supplier will receive their money in the end, no matter what payment method you opt for so they aren’t missing out on anything. Too much objection to a secure payment method should make you question whether or not the supplier is genuine whereas a reputable supplier should understand your request for an alternative payment method and will work with you using alternative arrangements until you are satisfied.

Trust works both ways

So, I want to leave you today with a final note on this and that is that trust works both ways. If you and your supplier agree to a system that means the payment isn’t released until the goods are received then make sure you do release that money as soon as your products arrive and you are satisfied. This is only fair to the supplier. Stay safe and be honest when it comes to paying for your purchases and you’ll soon be sourcing stock for a great price without the risks.

 

This article first appeared on The Source Report» Blog. Read more and comment here