CASH AND CARD AS PAYMENT METHODS

We are all familiar with paying in cash

Cash as a payment method does not require a mobile phone, application or a plastic card. However, cash is not the easiest or a free payment method – it takes time to count the cash and errors may occur. Furthermore, cash needs to be separately deposited in a bank account or through another operator. It is also a safety risk, while the transport and storage may pose a risk of burglaries.

The costs of accepting cash are roughly in line with the card payments costs.

Paying with a card is easy and safe

Finland is one of the leading countries in card payments. The two largest and most reliable card payment operators in Finland are Verifone Finland Oy and Nets Finland. Payment terminal solutions must comply with the Payment Card Industry Data Security standards (PCI standards). The PCI DSS standard (Payment Card Industry Data Security Standard) provides security for the card payments and defines the minimum technical requirement level for the card payment security. The standard is managed by an international, independent body PCI Security Standards Council.

You can currently pay with cards using separate payment terminals. A card can be a physical card (e.g. Visa Debit) from which the data is read using the chip or NFC, in other words, near-field communication. Magnetic stripe cards are rarely used.

An application downloaded in the mobile phone of the customer may function as the payment card (as such, if NFC-enabled), for example, Google Pay in the Android devices and Apple Pay in iPhone devices. This is called mobile payment. It means that the customer and the smart device used by the customer are identified at the scene, and the payment can be made through a payment terminal or online.

Payment terminals

A payment terminal that best meets the needs must also be chosen in connection with the purchasing of the POS system. Payment terminals are typically divided into two categories: integrated and external terminals. The sum of the purchases is entered manually in an external terminal, whereas integrated terminals are controlled by the sales application or device. In short, integrated payment terminals are safer, in addition to being easier to use and quicker. Integrated payment terminals are connected to the controlling unit with a cable (network cable, serial cable, USB) or wirelessly (Bluetooth, WLAN).

INVOICE AS THE PAYMENT METHOD

An invoice is a document or message which includes the information of the sold product or service as well as the agreed price. The invoice can be printed or an electronic invoice. The invoicing method is agreed with the customer.

An electronic invoice can be an e-invoice, email invoice or a paper invoice through a printing service.

E-invoice

For an e-invoice, you need the customer’s e-invoicing address as well as e-invoicing software that sends the e-invoice. One of the benefits of an e-invoice is that you can approve, charge and deliver invoices to the accounting without making a manual entry. In this way, the recipient of the invoice saves time and avoids errors in invoice processing.

Email invoice

Receiving invoices via email is a convenient way to receive invoices quickly for many consumers and small companies. Good invoicing software sends the invoice to the customer and monitors whether the message gets through and the customer opens the invoice. The email invoice can be sent in PDF format.

Through a printing service

The biller sends the invoice in electronic format, but the recipient receives the invoice in a printed format. In this case, the invoice is sent from the invoicing software to the printing service, which mails the invoice to the customer.

An invoice is also the basis for keeping the accounting records and it must fulfil the requirements of the tax authority (taking into account the requirements laid down in the Value Added Tax Act). The entrepreneur is obliged to store all the accounting material for seven years. In electronic archiving, it is a requirement that the material is stored at least in three different locations.

In invoicing, the entrepreneur assumes the credit risk, which can be reduced by conducting a credit inquiry on the financial situation of the invoice recipient.