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Invoice payment methods: Six options compared

Invoice payment methods: Six options compared

You’ve received the purchase order, completed the request, and sent an invoice. Now for the fun part: getting paid.

But there’s one final, important question that needs to be answered: how will you get paid?

Businesses accept a wide variety of payments.

The ones you choose to accept (or use if you're paying invoices) might have more of an impact on your cash flow and profitability than you think.

Key takeaways

Consider fees, processing time, and ease of use when you're choosing an invoice payment method

There may be tradeoffs between convenience and costs

For receiving invoice payments, think about what's easiest for your customers as well

Invoice payment methods comparison table

There are many things to consider when choosing which invoice payment methods to offer. We’ve organized the essential information into a table to make it easier to compare options.

Read below for more information on each payment method.

Payment Type Processing Fees Processing Times Pros Cons
Cash None None - No payment processing fees
- Can immediately be used on expenses
- Difficult to receive exact amounts
- Unsafe to exchange abroad
- Must be deposited at a bank
Checks None 1 to 2 business days - No payment processing fees
- Can be processed electronically
- Potentially bounces if the customer has insufficient funds
- Possibly canceled by the customer after being sent
Credit Card 1.5% to 3.5% 1 to 3 business days - Immediate response if there's insufficient credit
- Usable domestically and internationally
- Processing fees based on a percentage
- Some processors release your funds in batches, not immediately
ACH Debit $3 to $10 1 to 3 business days - If offered by your bank, the fees are low or free
- Has bank-grade security
- Limits on the number of transfers and amounts
- Can only facilitate domestic payments
Wire Transfer $15 to $50 1 to 3 business days - Facilitates international payments
- Has bank-grade security
- Processing times can be long
- Fees tend to be high, especially for international payments
Digital Wallets 1% to 4% 1 to 5 business days - Convenient option that gives customers flexibility
- Some offer seller protection if something goes wrong
- The transaction and account fees can be high
- Funds held can take up to 5 days to transfer to a bank

Six common payment methods compared

Below, we’ve listed six of the most commonly offered invoice payment methods.

From the tried and true of physical cash to the modern option of new digital wallets.


Cash is the old tried and true. Once that cash is in your hand, there’s no worrying about a deposit bouncing or processing times.

However, cash is also prone to getting misplaced and tough to get exact amounts.

Cash also has one key limitation: sending it far distances is tough. 

If you’re not doing in-person business, you risk losing cash in the mail.

Not to mention, international sales means dealing with foreign currency and exchange rates.

But if your sales process means being on-site to accept cash, it’s a viable option to get your payment fast and confidently.


Historians claim checks have been used in America as early as the 17th century.

Before then, checks go as far back as the 9th century.

The check system we use today has advanced from its early days, but it’s still based on the same principle: transferring money without having it on hand.

Depositing a check triggers the request for funds from the payer’s bank account to your own. 

A check “bounces” when that payer’s account doesn’t have enough money to fulfill the request. This can happen with the most common type of check: personal checks.

Two other check types avoid the pain of the deposit potentially bouncing.

A cashier’s check is drawn from the bank’s own account as opposed to the sender’s. The sender is responsible for replacing those funds once the check is processed.

A certified check involves drawing the funds in advance of writing the check.

Your customer would have to go into their bank to submit a request for a certified check. The bank confirms the funds are available and puts a hold on them until the check is deposited.

These two check types are unfortunately harder to obtain.

Typically, the sender must go into a bank to obtain them as opposed to writing one on demand.

Checks are easier to handle than cash but are not without drawbacks. 

  • They can bounce unless the payer goes through extra steps to verify the amount
  • Physical checks can get lost and need to be reissued
  • You may be required to go to a physical bank to deposit them

However, there’s now the eCheck: the same transaction process handled electronically. This curbs some of the pain points of physical checks.

Credit card

In 2022, the Federal Reserve Bank of San Francisco found that cash use has decreased with payers favoring credit cards, especially if they are under 25

This shift was partially driven by the pandemic, but the trends were there before 2020.

What this means is there’s a good chance your customers can conveniently pay you using an invoice payment method they already use.

Accepting credit cards means using a credit card processor.

Much like choosing payment methods, credit card processors aren’t a one-size fits all solution. Options like Square and Stripe all have their own pros and cons.

A key thing to consider when choosing a credit card processor is its fees.

Regardless of which option you choose, you will face fees on each transaction. But each processor has a different fee structure.

Credit card processing fees are often a combination of a flat fee and a percentage of the transaction amount.

As a rule of thumb, the higher your transaction amounts, the lower you want the percentage of the transaction to be.

Use your average order value to get an estimate of what your per transaction fees would be with each processor.

These fees ultimately mean you’re not going to receive the full amount you’re owed.

Consider if this trade-off is worth it for the convenience and ease of receiving credit card payments.

Wire transfer

Wire transfers electronically transfer money from one bank account to another, even if it’s internationally.

The sender initiates the transfer with their bank or a third party like Western Union.

They disclose to the bank the amount, the recipient’s information, and the necessary account information. Account information includes

  • Account number
  • Branch number
  • Bank's routing number

With this information, the sender’s bank can securely transfer the funds to the receiver’s bank.

It can be as fast as same day domestically, but expect longer processing times for international wire transfers.

Wire transfers often have fees for both the sender and the receiver. 

For example, Bank of America charges $30 for outbound domestic wire transfers and $45 for outbound international wire transfers. Incoming wire transfers cost the receiver $15.

ACH debit

Whether you know it or not, you’ve likely sent money using an ACH (automated clearing house) transfer.

If you’ve ever used a debit card, an ACH transfer has been made in the background.

More specifically, people can use ACH transfers (either credit or debit) to send money directly.

The one you’ll use to receive invoice payments is the ACH debit.

An ACH debit works similarly to wire transfers: banks connect to transfer the funds from the sender to the receiver.

The key difference is that an ACH debit is a request for funds.

That means that an ACH debit isn’t initiated by the sender, but by the receiver.

The receiver submits to their bank the sender’s account information and the amount to be debited.

The bank then puts in a request for those funds which gets added to a queue.

ACH queues get cleared out multiple times per day making for short processing times.

If there’s an error or inability to withdraw the funds, the receiver gets notified and the transaction is canceled.

The process ultimately works similarly to a check.

A request for money is made and the transaction bounces if there are insufficient funds or an issue with any of the banking information.

Your bank might charge ACH debit fees, but often these are charged to the sender, not the receiver.

Rarely are ACH transfers offered for sending and receiving money internationally.

There are also limits on how much you can move on a given day or month and transfers are only made on business days which can extend wait times for receiving funds.

However, if you do business domestically and won’t process amounts past your limits, ACH debits can be a great invoice payment method.

Digital wallets

For businesses that want the maximum flexibility for their customers on a simple setup, there’s digital wallets. Examples of this include

Digital wallets connect with the payer’s bank accounts and credit cards. Users can pay for a transaction by withdrawing funds directly from their bank account or charging it to their credit card.

While the convenience is high, these options typically come with the highest fees. On top of transaction fees, some will charge you a fee for transferring money to your bank or even for holding an account.

What to consider when choosing payment options

There’s no single perfect invoice payment method.

You’ll want to offer multiple options so your customers have an option available that works for them. But when thinking about which ones to offer, ask these questions.

Where are your customers located?

Cash and checks work best when they’re quite literally changing hands.

If you aren’t close to your customers, you won’t want to risk money being sent in the mail where it spends time in transit and can get lost.

If you’re dealing with international sales, you’ll need to tailor your options to what your customer base can offer. In this case, you’ll want to accept credit cards and wire transfers.

Are your sales high in quantity or amount?

Each invoice payment method has different fee structures.

One key difference to focus on is whether the payment method is a flat fee or a percentage fee.

For businesses that process a high quantity of sales at low dollar values, a flat fee will quickly add up and eat into your margins. 

Whereas businesses that process a low quantity of sales at high dollar values might actually benefit from a flat fee.

For example, if a percentage processing fee is 5% and your average order value is $20, your expected fees will be $1.

Compare that to a $200 or $2,000 order value, and the expected fees will be $10 and $100 respectively.

The higher the order value, the more likely it is that a flat fee will save you money on every order (depending on the fee amount).

How secure is the payment option?

Secure payments serve both you and your customer. 

Regardless of what amount is being sent, there’s usually information being shared that could leave someone vulnerable to identity theft or fraudulent transactions.

Bank transfers and wire transfers are heavy on security as it doesn’t involve a third party. The information is passed directly from one bank to another.

For higher payment amounts, choosing a more secure option with higher fees could give both you and your customers peace of mind.

What do your customers prefer?

No matter how much reasoning you have for choosing to accept certain payment methods, it doesn’t mean much if your customers aren’t on board.

Before making any changes to your invoice payment options, reach out to some of your top customers to get feedback. Or reach out proactively to see if they have a preferred method you’re not yet offering.

How to improve processing invoice payments

Your invoicing and payment processing should work for you. That’s why BILL.com supports ACH and credit card payments in-app while making the rest of the accounts receivables process run on autopilot.

BILL syncs with the top accounting software like Quickbooks, Oracle, Xero, Sage, and more to sync accounts receivables information and save you time on entering info in multiple places.

Try BILL for yourself to see how we can save you time and help you get paid.

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