An important principle in marketing is that the easier it is for a customer to pay, the more likely it is that they will buy from you or pay their bill on time. Whether you run a service-based or product-based business in Israel, you need a way to accept payment that is efficient, cost-effective and user-friendly.
Paybox and Bit
Paybox and Bit are two Israeli platforms for transferring money quickly and easily and are ideal for small sums. One advantage of accepting payment via one of these apps is that customers can send you payment while you are talking to them and it arrives immediately. In Paybox, the money stays in the app and can be downloaded to your bank or used to make your own payments. In Bit, the money goes straight into your bank account.
Another advantage is that you may meet customers when they don’t have any other means of payment on them, but they almost always have their phones. Even someone who left their wallet at home for the sole purpose of not spending any money can often be tempted to make a purchase once they realize they can pay via app.
Regulations, fees and terms of use change periodically in these apps. For instance, there is now a fee in both apps for going over 25,000 NIS of payments annually. You can choose to accept only one or the other, based on what’s most cost-effective and efficient for you. Or you can let customers choose, since getting paid quickly is more important to you than an extra fee or lack of convenience.
Grow by Meshulam
Grow by Meshulam is a solution for accepting credit cards, Google Pay, Apple Pay and Bit from customers, either in person (via the app) or online. If you manage an e-commerce shop or sell products in a brick and mortar store or at fairs, you may find this to be the easiest payment solution. Even if your business is service-based, if enough clients want to pay by credit card, consider offering them this option. Grow charges a fee and takes a percentage of the sale, as all credit card processors do, so take that into account in your pricing.
Grow integrates with invoicing software, so you can send an invoice with a link that allows your customer to pay immediately using their credit card, Google Pay, Apple Pay or Bit. Once payment is processed, they will automatically receive a receipt, saving you time and energy.
PayPal
The advantage of PayPal is that customers trust its security and often prefer it to providing you with their credit card details. It can be used internationally, so it’s easy for overseas clients to pay you. However, their transfer and conversion fees can be high, so take that into consideration before deciding to accept PayPal.
Bank transfer
A bank transfer is easy to accept, since you don’t have to take any action once you’re paid. When transferring large sums, this is often the best method. Some customers are familiar with their bank’s platform/app and prefer to send money via bank transfer, while others might be reluctant. Bank transfers do incur a fee, but if you pay a flat fee for all bank activities, this will not be a concern.
Checks
Checks have largely gone out of fashion in the Israeli business space, and for good reason. It’s time-consuming to write a check, it can be deposited any time in the six months after it’s issued, leading to unpleasant surprises, and it can be transferred to a stranger. Adding to that, “the check is in the mail” is a popular joke because it’s true. However, if a customer insists on paying via check, you can certainly accept it. Remember that if you deposit a check before the date written on it, you will be charged a fee. Checks clear three business days after they are deposited. If the check says “Lamutav Bilvad” on it (beneficiary only), it can only be deposited in an account with the same name as written on the check, so be sure to let your customer know what name to write.
Stripe – not supported in Israel
Stripe is a popular online payment method in many countries but it is not supported in Israel. If you have a US-based Limited Liability Company (LLC), an Employer Identification Number (EIN) or Tax ID, a physical US address, US phone number and US bank account, you can use Stripe while residing in Israel. Otherwise, it is best to use other payment methods.
Choosing the right payment methods for your business
Which payment methods you offer your customers is a decision that must take into account several factors:
- Are you generally getting paid in person or online?
- Are you accepting large payments or small amounts?
- Are your customers mostly in Israel or overseas?
- Are you being paid by young people or by older adults?
- Can you add transfer, conversion and processing fees to your price?
- What technologies do you feel comfortable using?
Once you answer those questions, it should be easier to choose the right payment methods for your business and encourage customers to buy often and pay quickly.