Here is the bottom line: Technology is marching on, with or without you. As a business owner who wants to succeed by providing cutting-edge products and services to your customers, you must understand the developments that are affecting retailers today. Digital payments are a case in point. Like it or not, the preference for digital payments is on the rise, making it in your best interests to learn what this trend is all about.
What are digital payments?
In the past, customers paid for goods and services using cash. Checks and even credit cards were basically paper or plastic tokens that served as its equivalent.
By contrast, digital payments are intangible. The term refers to any transfer of funds from one account to another that takes place electronically. Types of digital payments include the following:
- Funds transfers that are conducted with QR codes and mobile payment service apps like PayPal or Venmo.
- Payments that happen using smart wallets via wearable devices or smartphones.
- Online purchases using browsers or apps.
- Crypto payments utilizing Bitcoin or other digital currencies.
- Electronic funds transfer (EFT) payments. (This umbrella term is used to describe all ACH bank transfers, wire transfers, and other online payment methods. Therefore, it is not a matter of “ACH vs EFT.”)
With every type of EFT payment including ACH, the recipient receives word that the payer has sent them a specific amount of money, as well as whether the funds are immediately accessible. In all of these cases, business owners can expect funds to be delivered quickly and securely into their merchant accounts.
Advantages of digital payments.
Now that you understand what they are, it’s time to learn why you should seriously consider integrating digital payments into your business model.
- Digital payments can be made from anywhere at any time. There is no need for customers to stand in long lines at the bank or wait for regular business hours.
- Digital payments are more secure. They use technologies such as SSL, certified end-to-end encryption, and tokenization to keep data safe.
- Digital payments offer greater convenience and predictability. Goods and services can be purchased on credit using a “pay later” option. Instead of late payments, you can simply withdraw a previously agreed-upon amount of money from your customer’s account.
- Digital payments cost less. All you need to do is submit a subscription fee to your payment services provider.
- Digital payments are transparent and are automatically recorded. It is easy to retrieve information later if needed.
- Digital payments allow you to let customers send funds to you via QR codes or contactless methods, making the process easy and safe during the pandemic.
With their emphasis on security, efficiency, and transparency, digital payments are transforming the way companies do business. If you have not yet brought them into your commercial ecosystem, now might be the perfect time. Talk to your merchant services provider to determine the products and services that are best for your growing company.
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