Unsurprisingly, offering your customers more ways to pay you back results in faster payments. Fortunately, there are more payment options than ever before to offer your customers, including online payments. Here are just a few of the perks you can receive by offering online payments to your customers.
There is, of course, the good ol’ fashioned cash and check, as well as widely accepted credit and debit cards, but now there’s also a whole galaxy of digital payment solutions, too. Online payments enable even easier transfers between accounts, making it easy to pay (for customers) and easy to accept (for business owners). With all of these new options, it can get a little overwhelming for a small business owner to gauge which solutions are right for them. After all, some require expensive hardware, others come with hefty transaction fees, and still others require ongoing subscription charges that can add up over time.
Despite the potential costs, however, these systems ultimately enable entrepreneurs to receive payments faster and more conveniently, keep better track of their transactions, and even allow them to stay open for business when they’re fast asleep. The convenience and quickness of payments coming in often make up the small upfront cost of accepting payments online.
The benefits of accepting online payments
By accepting online payments, you’re reducing potential friction that could serve to discourage customers from making a purchase, or to send payment on time. By providing more diverse payment options, customers have the ability to choose the option that is most convenient for them, and pay from wherever, whenever and however they want.
Accepting online payments also comes with a range of benefits for the recipient’s back office, as cash can be expensive and time-consuming to manage, track or utilize. Comparatively, online payment tools will not only keep your money more organized, but will also provide data and insights related to your transactions. For example, there are platforms that can automatically keep your transaction records up to date, help you track cash flow, automate a range of accounting practices, and provide new insights that can help you better manage your business.
Online payments also enable faster checkouts, and in some cases provide the option of one-click payments, making digital transactions faster and more convenient while also being available 24/7/365.
As a result of providing these added conveniences, many business owners often see an increase in sales. According to a study by the US Bank, 76% of consumers carry less than $50 cash at any given time, and use cash to make payments less than eight days in a month. Especially for businesses that operate directly to consumers, you’re opening yourself up for business to the majority of customers who rarely have cash on hand.
Potential downsides of online payments
While online payments can make transactions quicker and more convenient, they also come with some potential drawbacks. For example, while it’s pretty hard to hack someone’s pocket, or intercept the handing of cash over a counter, digital payments do come with the small but noteworthy risk of fraud, theft and technical problems like system outages and server problems. Unfortunately, even a slow wifi connection can quickly make what should be the most convenient solution into more of a headache than it’s worth.
Furthermore, digital payment platforms typically have a cost associated with each transaction or a monthly service fee, depending on the service you choose. If you’re also looking to accept payments directly from customers in person, there can be upfront hardware costs for things like point-of-sale systems and credit card readers.
While most business owners will see a spike in sales and less wait time before receiving payments as a result of accepting online transactions, it’s important to ensure that the financial benefits offset the costs associated with the payment system itself. Depending on the nature and rhythm of your business, accepting digital payments (like credit cards or debit cards) may or may not make sense.
Using a trusted online payments platform such as Wave Payments will help alleviate some of these potential worries by offering a simple, yet effective way to ensure payments are completed on time, without hassle.
The difference between online payment types
Most people can hardly remember a time when credit cards were accepted via a handheld puncher, but not long ago those same hunks of plastic were entirely divorced from the digital world, at least from the consumer’s perspective. Since online payment systems often use credit cards as the primary payment tool, hard plastic and digital payments seem inseparable. Thankfully, most online payment platforms go beyond just accepting credit cards and debit cards. In fact, plenty of these platforms offer direct transfers between bank accounts, circumventing credit and debit cards entirely.
While either payment type has associated risks, both types are providing new and enhanced safety and security solutions. Online payments, for example, are increasingly dependent on biometric identification, especially on mobile devices. These enhanced security features typically require a fingerprint or other physical identification before processing a payment. Banks and financial institutions, meanwhile, are utilizing sophisticated machine learning algorithms and analytics to detect irregularities or suspicious transactions and block them in real-time. While credit cards and online payments have associated risks, both are becoming safer and more reliable by the day.
How invoices and online payments can work together
When it comes to getting invoices paid, fewer hurdles for the customer means faster and more predictable payments. Considering the flexibility and security that online payments provide, why not give your customers the option to pay your invoices by credit card, debit card or directly through their bank account? This can encourage faster payments—which could ultimately have a significant impact on cash flow, especially for small businesses—but it also takes any confusion or miscommunication about payments out of the equation for good.
The popularity of online payments is rising drastically, and that means customers are more comfortable than ever before with paying by credit or debit, or even through their bank account. For a lot of small business owners, the potential of saving time on chasing payments, as well as the opportunity to cut back on operating costs means they can start focusing on business growth.
The information and tips shared on this blog are meant to be used as learning and personal development tools as you launch, run and grow your business. While a good place to start, these articles should not take the place of personalized advice from professionals. As our lawyers would say: “All content on Wave’s blog is intended for informational purposes only. It should not be considered legal or financial advice.” Additionally, Wave is the legal copyright holder of all materials on the blog, and others cannot re-use or publish it without our written consent.