3 ways electronic payments can help your business
Electronic payments are seamless, simple, and quickly becoming a staple of the retail world. They allow conveniences for both consumers and business owners, significantly increasing their opportunities to make purchases and your chances of making sales.
By 2023, it’s projected that online payments will make up almost a quarter of all retail transactions worldwide. Because some businesses may want to enter the e-commerce market but are unsure how to, this article will focus on first making electronic payments familiar and then detailing how they can benefit businesses of any size.
What are electronic payments?
Electronic payments are transactions that occur through a digital medium (for example, credit & debit cards, e-payments, bank transfers, automated clearing house (ACH), etc). Instead of exchanging the actual payment in cash or a physical check, electronic payments use encrypted data, the internet, and payment processors to exchange funds between two parties.
Electronic payments are also often called “online payments,” which can make for some confusion. When people refer to online payments, they are typically speaking of transactions made on online storefronts or through mobile payment services (Venmo, Paypal). But, technically speaking, using a credit card at a physical storefront can also involve “going online” (using internet services) and can also rightly be called an online payment.
For this reason, this article will use both terms to refer to vending that takes advantage of online capabilities and the digital marketplace.
Reach more customers and sell more products
Perhaps the greatest benefit of incorporating online payments is the increase in scope. Operating an online storefront allows your customer base to be limitless, reaching beyond your town, state, country, or even continent.
Online storefronts can enable various forms of electronic payment options within them, increasing customer convenience and increasing the chance of landing sales. Furthermore, a business website can also go a long way in creating awareness of your company and forming a faithful consumer base.
Only 36% of small businesses in the United States have a website, yet more than 70% of consumers research products and companies online before choosing where to shop. There’s an obvious and growing supply of online shoppers, and enabling convenient online payment options go hand-in hand with meeting that demand.
While on the topic of convenience, following the COVID-19 pandemic many consumers are choosing where to shop based on whether or not the business offers contactless sales.
One way to offer this service is by hosting electronic payments over a virtual storefront and then delivering products/services, providing both contactless payments options and contactless product exchange. And as for offering contactless payment options in-store, some modern POS systems allow customers to make purchases by simply swiping their phones or credit cards near the POS terminal.
Quick, secure payments: Many aspects of the payment system have become modernized, from POS systems to credit card chips to cloud based payment processors. These developments have strengthened security that cash-only payments cannot provide.
With electronic payments, customers can now make purchases without carrying cash or without having to visit their banks to withdraw funds. For small purchases, this may not seem all that much of a benefit, but for larger purchases and transactions that are to be paid out in multiple payments, this is an attractive alternative. Few people feel comfortable carrying more than one hundred dollars on them in cash, and some business owners may feel nervous holding large sums on them until they deposit that money safely into a bank.
This isn’t a concern with digital payments, as money is directly channeled from a customer’s bank account to the merchant’s. There’s no need to worry about carrying large sums of cash for both the consumer and the merchant.
Set up recurring, automatic and budgeted monthly payments: Digital payment options are an efficient and more secure way to instill payment plans with your customers. Funds can be pulled at automated and set durations, transferring funds like clockwork in the background of the customer and merchant’s busy lives.
No merchant wants to hound their customers for payments. Likewise, no customer wants to shop somewhere they feel pestered and annoyed, but merchants have a right to be paid what they’re owed promptly. These automatic payments will allow you to focus more on your business and less on contacting customers and managing the collecting of funds. The exact amounts and times of these automatic payments are also fully adjustable at any time, so if changes need to be made, you and the customer can rest easy knowing that nothing is set in stone.
Working with your customers to budget out a payment plan that’s feasible for both parties can go a long way in strengthening customer relations and efficiency in acquiring funds. Doing so through electronic payments is key to fulfilling this goal in today’s modern digital world.
Eliminate non-payment issues: Electronic payments simplify the process of knowing when clients have past dues and declined payments. This allows you to take an early step on resolving these issues, delaying services, or canceling shipments. Payroll processors can even alert you when these arise, helping you save money and be more prepared to serve your customers.
Reduces manual data entry: Many of us have fond memories of closing the cash register at night and manually tallying products sold, money collected, and sums dropped. Today’s workers have even fonder memories in which electronic payments allow all of this data to be collected instantaneously at no worker’s expense.
The automatic retrieval and organization of payment data that electronic payments provide is an invaluable tool that allows you to make better business decisions. Payment processors can track this data and present to you in real time the statistics of your business: what’s being sold, what’s not, product quantity, most popular payment option, busiest sale hours, etc. Save time and worker hours and let the electronic payments do the data entry work for you.
Helps streamline the buying process: The easier it is for your customers to exchange payments, acquire your services, and then leave your establishment, the more likely it is they’ll return in the future and speak well of your business.
Electronic payment systems strengthen each part of the buying process:
- Automatic billing, online purchases, and paying with a swipe or tap of a credit card (or phone!) on modern POS systems make transferring funds quick and easy.
- Quicker purchases and direct deposits mean business owners can focus more on preparing and delivering their services rather than securing funds, which means getting products to customers more promptly and with better quality.
- The increased efficiency of the above two steps leads to customers being able to exit your establishment quicker and more satisfied. This allows you to serve more customers, save worker hours, and build your company’s reputation.
Enabling electronic payments in today’s world is a must. Consumers are quickly becoming acclimated to the ease of use that digital payments provide, so much so that many will actively avoid businesses that do not offer them.
Furthermore, digital payments make the payment process easier for business owners. Automated payments, data entry, and streamlined transactions free up worker hours, expenses, and time that business owners can use to focus on quality service and leadership decisions.When enabling electronic transactions, it’s important to team with the best payment processor who can tailor to your exact needs and business ideals. Make sure to take the time to research options and consider the specifics of what your company does and does not require.
Looking for a partner who can help you enable electronic payments at your business?
Heartland is the point of sale, payments and payroll solution of choice for entrepreneurs that need human-centered technology to sell more, keep customers coming back and spend less time in the back office. Nearly 1,000,000 businesses trust us to guide them through market changes and technology challenges, so they can stay competitive and focus on building remarkable businesses instead of managing the daily grind. Learn more at heartland.us.