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Is online or offline the best way to collect payment from customers?

Updated on :  

08 min read.

There are several ways to collect payments from your customers. As a business owner, one must decide which is best suitable according to its speed, transparency and security. 

Meaning of offline payments and online payments

The offline mode of payment works without the internet; hence it is termed “offline”. They are easy to trace as it is directly received by the business and is thus considered more transparent. Some of the examples of offline modes of payment are cash and cheques.

An online mode of payment requires an internet connection. In this payment method, customers’ money is transferred to your account as soon as the customer makes the payment. Some examples of online modes of payment are credit cards, debit cards, and Google Pay.

Comparison between offline payment and online payment

ParticularsOnline modeOffline mode
Exchange of moneyMoney is exchanged electronically. It is an internet-based method involving computer networks and digitally stored data.Money is paid directly to the vendor. It does not involve using any payment gateways, but it may involve banks in cheque or demand drafts.
RiskThe customers have to enter their details, and thus, the risk of identity theft is relatively high.It is a direct payment method that does not involve exchanging personal data. Thus, it is more transparent and risk-free.
Service chargesIt involves service charges when payments are made through credit cards or debit cards.There are minimal charges in case of demand draft and cheques.
PaymentIt is a contactless payment method. The funds get directly deposited into your account.In this method, someone needs to be physically present to receive the payment.
Preferred byIt is a preferred method usually opted by the younger population.It is a preferred method for the older population.

Pros and cons of online payment and offline payment

Offline payment:


  1. It is a transparent payment method as both the giver and the receiver are aware of the transaction at the time of the deal.
  2. It is a traditional and easy way of payment and is thus the most-trusted payment method.


  1. It is limited by factors such as distance and acceptance by another party.
  2. It is not recommended for transactions. 

Online payment:


  1. It is a contactless payment method.
  2. It is preferred for the younger generation as it is extremely fast and convenient.
  3. One has a complete record of payments made. This helps to reduce fraud.


  1. It involves some service charges.
  2. There is a risk of customer data theft. 
  3. There are chances of facing loss due to debit card/credit card fraud.

Impact of offline payment on business cash flows

Below is the impact of offline payment on business:

  1. Cash: The person gets right away access to cash as the payment is in hand. Thus, there is immediate cash flow that helps the business meet its obligations such as payment to its vendors, salary, loan repayments, etc.
  2. Cheque: This is a more secure method as the money is deposited in your bank account. The processing cost is also low, and it usually takes 2-5 business days to clear a cheque. As the money is directly deposited in a bank account, it is helpful for cash flow. 

Thus, we can say that offline payments increase liquidity and positively impact business cash flows.

Impact of online payment on business cash flows

Use of credit cards/debit cards, mobile wallets, e-transfers, etc., facilitate real-time payment. Real-time payments reduce the risk of business uncertainties such as late payments. Immediate transfer of money boosts the working capital of a business. Improved cash flow helps a business meet all its business obligations on time and win customer trust.