When was the last time you paid for anything using cash? You probably had to think for a few minutes before coming up with an answer, especially one that involved buying from a business. Digital, contactless payments are booming, and it is estimated that the value of electronic payments will reach $6.68 trillion by 2021.
Digital payment systems are the wave of the future, and if your business isn’t accepting them then you’re missing out on customers, sales, and a simple way to increase your revenue.
The first step to accepting electronic payments is getting your business incorporated, if you haven’t already. You can use one of these top online incorporation services to help you get the process started.
Once you’ve incorporated, you can take steps to accept payments via credit card, mobile phone and even over the internet, to ensure you get a piece of the $6.68 trillion electronic payment pie. Electronic payment options make the lives of both business owners and customers easier. Here are just a few ways your company can benefit from accepting digital payments.
1. Digital bill payment solutions offer instant payments
Electronic payments with an app, card or mobile wallet are almost always faster than cash payments.
Whether you’re in person or online, purchasing anything is faster when you don’t have to handle cash or checks.
Accepting digital payments is not only beneficial for you as a business owner, but for your customers as well. An electronic payment system can take funds from anywhere in the world instantly, and you can make that sale even if your customer lives on the other side of the globe.
Mailing a paper check to pay a bill takes customers’ valuable time. They have to find an envelope, hope they remembered to buy stamps, write the check, and put it in a secure outgoing mailbox where thieves won’t be able to steal their bank account information.
With the option to make an online payment, they can pay their bill online instantly from the comfort of their own home, using their credit card and a click of a button. Not to mention, having an electronic payment system ensures that invoices are paid on time.
2. Enhanced security
Digital payment solutions offer multiple security checkpoints, making them incredibly safe and reducing fraud. Tokenization, encryption and SSL are just a few ways the payment gateway ensures your electronic payment data stays safe throughout the transaction.
Tokenization keeps your sensitive electronic data secure. This could include debit or credit card numbers or bank accounts, which are transformed into secure data using a randomized token value held in a token vault. This form of encryption is incredibly safe and nearly impossible to breach.
Encryption is another secure method to make sure that sensitive information remains private. As data breaches become more common, keeping payment information private is more important than ever, both for consumers and businesses. Digital payments provide the opportunity to keep transactions safe and secure for buyers and sellers.
Business-to-business payment security solutions automate the transactional system reducing risk and increasing business security. These solutions include things as simple as having backup system solutions, taking extra care when replying to emails, and encrypting hard drives.
Security is one of the most important advantages of electronic payment systems, and one of the reasons more companies and consumers are embracing this payment method.
3. Digital bill payment solutions generate more sales
If your company only accepts traditional payment methods, you’re severely limiting your client base. Traditional cash methods can only attract sales of buyers in the physical vicinity or your store, while electronic payment solutions open businesses to anywhere consumers have access to the internet .
Another important aspect to consider is that cash payments may not always be available. What happens if, say, there’s a global event that causes people to remain in their homes over long periods of time?
If you’re solely relying on foot traffic to make sales, you’ll find yourself hurting for customers and sales pretty quickly.
Online payments offer an alternative way to pay, allowing your company to remain flexible regardless of what might be happening in the world.
Flexibility is key for both long- and short-term growth, and accepting electronic, contactless payment options is one of the easiest ways to have this.
Studies have shown that customers tend to spend more money when using digital payment solutions as compared to cash. When we pay with cash, we feel the pain of the money leaving our wallets, while we may not notice the reduction in our bank accounts after we swipe a credit card.
If customers have the chance to spend more with your business, that can turn into more sales, more profit, and a chance for you to upsell your products or services without having to gain additional customers.
4. Convenience and accessibility
Imagine you walk into a grocery store with a list of items you need to feed your family for the week. When you walk in, you realize that there are no grocery carts available. You’ll need to carry everything you want to buy using your own two hands. Do you go to a different store, or do you go ahead and attempt to shop?
Most consumers will probably find somewhere else to shop. The convenience of the cart makes shopping more accessible and allows them to easily buy everything they need without having to worry if they can carry it or not.
Similarly, electronic payments are the “cart” for your business. They allow users to purchase products or pay their bills with credit cards, avoiding late payments even if their bank account is a little short.
And with the convenience of automatic billing, you don’t have to send reminders or mail a bill. Your customer never has to wonder if they remembered to make the payment to you because they know it’s already done!
Digital payment solutions can offer automated processes such as automatic renewal and automatic billing. These offer consumers the opportunity to subscribe to products or services they love without worrying about one more bill to manage regularly. They also eliminate the need for a person to spend valuable time entering payments or matching invoices and checks.
One of the major advantages of electronic payment systems is that customers can purchase or subscribe to your products whether they are home, at work, or even on vacation. With more and more customers focusing on shopping online rather than in store, offering the chance to pay on your website or online is an important step for modern businesses.
5. Certainty of payment
One of the biggest advantages of electronic payments for business owners is the certainty that the payment will be approved. As soon as the transaction gets through the payment gateway and the credit card company approves it, you know the funds are there.
If you accept paper checks, there’s always a chance that a customer will forget to pay their bill, leaving you on the hook for services and unexpectedly reducing your cash flow. Even worse, if you're selling physical products and the customer uses a check to pay, you've lost both the product and the money.
And even if they do send the check in the mail, if it isn’t approved you could be left with bad check fees and the hassle of contacting the client to let them know what happened.
These situations are frustrating for consumers and business owners alike. You could end up on the hook for a product that was never paid for, a service that wasn't used, and less money in your bank account than you were expecting.
Digital payments are approved transactions; therefore, you know with certainty that payments went through. There are no additional steps, unlike traditional payment methods, where you must validate the tender, transport it and deposit funds into your bank.
Not only do these steps take additional time, transporting cash always involves a risk and could have additional costs to you, such as hiring a service to transport your cash safely.
The risk of theft, money laundering, or other disasters is reduced when you begin accepting payments by credit and debit card systems.
Traditional cash methods of payment are on the decline, and if those are the only payment methods you accept, you’re missing out on sales.
As our society becomes more global, your customer base no longer includes only those who live near your place of business. The ability to reach customers all over the world is only one of the many benefits of accepting all forms of contactless payments.
Small businesses must stay ahead of the curve if they want to please customers and beat out competitors. If your products or services are difficult to pay for, if they require extra steps from consumers, or if you only accept cash, you may be missing out on customers and the opportunity to close more sales.
Accepting online digital payments is one of the easiest steps you can take to help grow your business and get a competitive advantage.
So what are you waiting for? Speed up your payments process today and set up your own digital payment solution with Melio.
*This blog post is intended for informational purposes only and is not intended as financial advice.
**Melio does not provide legal, tax or accounting advice, and you should consult with a professional advisor before making any financial decisions.