Get the tools needed to grow your business in the digital economy
Almost everything seems to have gone digital these days. We can pay bills, buy groceries, order take-out, earn a paycheck, get an education, ask the robotic vacuum to clean the house, carry out our holiday shopping, and keep in touch with friends and relatives without even leaving the couch.
Consumers have come to expect certain conveniences, so making them available is a must. Because of this, companies that don’t offer the option of e-payments and other digital features are now finding themselves struggling to keep up with the competition, or keep their doors open.
If you haven’t yet added e-payments to your range of customer services, now is the time to do so. Maybe you’re concerned about the cost of incorporating an electronic payment platform into your current operations. Perhaps you already offer electronic payments but are second-guessing the value they provide? Either way, we’re going to look at what it takes to begin or enhance your online payment presence, and make this work for you and your customers.
Taking a Closer Look at Electronic Payments
Many people are surprised to learn that electronic payments have actually been around since the late 1800s. Western Union created the field with their initial electronic funds transfer service. This was quite novel at the time because most people wouldn’t get electricity in their homes for another 50 years later.
In the beginning, electronic payments weren’t easily accessible to everyone. Options were extremely limited in this realm as well. Consumers could send and receive money, but that’s about it. Stores didn’t widely accept e-payments, so the general public couldn’t make purchases virtually everywhere like they can today. Also, most people were leery of sending money via a wire as well.
Things have certainly changed. In 1991, the Internet went live. By 1994, online banking was beginning to take shape. Of course, Amazon was founded that same year, and would eventually take the notion of e-commerce and electronic payments to new heights. Consumers and businesses have never looked back. E-payments just make sense at this point, and they can help improve small businesses in numerous ways.
Exploring the Ways E-Payments Can Transform Small Businesses
Accepting e-payments can give small and medium size businesses (SMBs) several advantages in today’s largely digital landscape. SMBs Companies that aren’t taking advantage of things like the rewards programs e-payments provide, could be losing out in many ways.
One of the more obvious reasons to convert to electronic payments or incorporate them into your repertoire is customer convenience. As we mentioned, consumers expect the ability to make online and mobile purchases and payments now. Electronic payments have become the alternative of choice for most consumers. Why? Because It’s a faster, simpler alternative to mailing in checks, or paying in-person.
If you don’t give customers the option of electronic payments and purchases, you could be losing a great deal of business to the competition. More than 40% of consumers say they look elsewhere if a retailer doesn’t offer e-payments. Over 20% of businesses admit they’ve lost business due to falling short in this department. Countless others are either unaware of the lost sales or in denial about them.
Offer More Payment Options
Consumers appreciate choices. This is true whether you’re talking about products and services or payment options. If you don’t accept electronic payments, customers are limited to cash, check, or paying immediately in the store. That doesn’t give consumers much flexibility, as people are carrying less cash. This is especially true with millennials, as they are starting to become a major driving force in today’s economy. Also, as the price of goods go up, consumers can’t carry large sums of money needed to handle large transactions, so offering an electronic payment is the perfect solution.
With electronic payments, you give your customers and prospects a wider range of options to transact, and in the means they’re looking for. They can pay online with their debit or credit cards, or link their bank accounts to an online wallet that directs payments into your account. You can also give them the option to break down sizable purchases into more manageable monthly installments.
Accepting digital payments provides greater freedom for your customers, and more revenue opportunities for your business. As such, customers will be more likely to choose you over the competition. Traditionally, customers who pay electronically spend more per transaction, which means greater profitability for you as well.
Improve Your Automation
Sorting out accounts receivable, keeping track of customers’ payments or lack thereof, and printing and mailing invoices are time-consuming tasks. According to some reports, small business owners spend at least ten hours per week on just that. For many, it can range up to 30 or 40 hours each week. At the same time, handling all those responsibilities manually leaves a lot of room for error. This all means you could be losing money just by trying to track your money.
Incorporating electronic payments gives you the benefit of automation. Even the most budget-friendly, small-scale e-payment platforms help you make better use of the technology that’s available to you. They automatically sort through your customers’ accounts, send notifications to those who owe you money, collect payments, credit accounts, and perform several other tasks.
All this will cut out a significant amount of the time, hassle, and confusion currently involved in invoicing and keeping up with customers’ payments. You can spend more time taking care of your company and its products or services. You’ll also spend less time worrying about when or if the money will be coming in as it should.
Better Chances of Getting Paid
What happens when you receive a bill in the mail? In some instances, it sits idly on a shelf or table for a while. Eventually, it may be accidentally shuffled to the bottom of the stack as more mail gets piled on. Then, worst case it gets thrown away with all the random flyers, credit card offers, and other pieces of mail you received. When this happens, bills just don’t get paid, and this happens more often than you’d think. It’s a sign of the times, when everything has gone digital.
Emailing invoices is better, but not by much. The average person receives over 200 emails per day. In the unlikely event that customers read those emails at all, they’re bound to forget many of them. Over time, they get lost in the shuffle and deleted. Again, the invoices you took the time to create and send just don’t get paid.
Electronic payment platforms can also send customers text notifications about the money they owe and give them the ability to securely pay you instantly from their phone. With just a few clicks, they can quickly and easily send your money as soon as they get these text notifications whether they are at work, at home, on the road, or anywhere else. They’ll be less likely to forget, and you’ll be more likely to get paid.
Speed and Efficiency
We’ve already mentioned the amount of time many small business owners put into invoicing and paperwork. It’s also important to point out that the conventional payment process takes anywhere from 20 to 30 days from billing to payment receipt. It could take even longer if customers don’t pay when they’re supposed to. You’re left waiting a month or more to get the money that’s supposed to be coming to you.
This may not seem significant when considering a single customer, but it really adds up when you’re waiting for a couple hundred customers to send in their payments. It could also cause mounting debts for you if paying your bills depends on them paying theirs. With electronic payments, this amount of time can be drastically reduced. Though payments could still take a few days to be processed, they’re often instant.
Security is on everyone’s mind these days, and with good reason. Cybercrime rose 46% from 2018 to 2019 alone, and it’s showing no sign of slowing down. Both you and your customers are concerned about the safety of personal data, bank account information, and other details. Modern electronic payment platforms are far more secure than those of the past, and there’s less risk involved than sending or accepting payments by mail or wire.
Many small businesses have yet to jump on board with electronic payments because they’re concerned with the costs involved. It’s no secret that e-payments come with standard processing fees and other expenses. Still, it’s only fair to delve into the costs of other types of transactions.
Switching from paper invoices to an electronic payment system saves the average company at least $10 per transaction after factoring in the cost of paper checks, processing costs, and other related expenses. When compared to the cost of checks, the savings are even more significant. All things considered, the cost of processing checks amounts to around $30 per transaction.
With standard ePayment platforms, you’re looking at a fee of three to five percent for each transaction. This may sound like a considerable cut of the profit. Keep in mind, though, less expensive options are available if you know where to find them. You will most likely be losing less money with e-payments than with other alternatives once all factors have been accounted for.
The Bottom Line
Not very long ago, cash and checks were the norm. Today, that’s definitely not the case. In fact, check transactions have been decreasing by an estimated seven percent each year since electronic payments became a widespread option. Countless cashiers aren’t even sure what to do with checks at this point. If you hand them a paper check, they have to call over a manager for assistance.
Even trying to pay with cash often garners an odd, somewhat annoyed look from store clerks. Few people carry around enough cash to make significant purchases anyway. Offering customers an on-site ATM might help, but many are reluctant to pay the associated fees to access their own money.
At Xpress-pay, we offer affordable, customized e-payment solutions for businesses. Plus, our new Silver Plan enables small businesses to eliminate the monthly and transactions costs involved in accepting online and mobile payments. With our simple, flexible, and convenient payment platform, you’ll save time, effort, and realize new revenue opportunities, while receiving payments more quickly and reliably. You’ll also have the opportunity to give customers all the convenience and selection they’re looking for, so they’ll have even more reasons to choose your company over its competitors.
Find out how we can help you start accepting ePayments for FREE with our new Silver Plan. We launched this exclusively for successful small business owners like you.