In an increasingly digital world, businesses need to adapt to stay relevant and grow. In addition to building a solid website and strong online presence, accepting digital payments provide many benefits.
While some businesses have jumped on the digital bandwagon, others may be a bit more hesitant. For those who are uncertain, here are a few reasons why embracing digital payments is vital.
Digital Payments are Growing
There are no two ways about it. Digital payments are growing. They’ve been on the rise for a while now, and the pandemic has significantly fueled their growth.
These days, cash and checks are on the decline. Customers might not carry bills in their wallets, but they almost undoubtedly have at least one credit card. While a business might be comfortable with how things have been, the shift to digital payments is becoming almost necessary.
Consumers Are Using More and More Credit Cards and Digital Wallets
According to a McKinsey survey, the number of U.S. consumers using two or more digital payment methods increased to 58% in 2020 compared to 45% in 2019. Globally, experts expect digital payments to reach $6.7 trillion by 2023, up from $4.1 trillion in 2019. In 2019, 18% of those digital transactions were point-of-sale. In 2023, experts estimate that point-of-sale digital payments will make up approximately 30% of all digital transactions.
Enhance the Online Shopping Experience
In a world where just about everything can (and often does) happen online, an online shop is vital. For businesses that don’t have an online store, it’s never been easier to set one up. There are plenty of platforms, such as Shopify, that can help.
By accepting online payments, businesses can meet the increasing demand for online shopping. They can also expand their customer base beyond the people who stop by their brick-and-mortar store. In other words, they can enhance the online shopping experience for their customers and boost their sales.
More Contactless Payments
Contactless payments have been around for a while, but their use has skyrocketed since the pandemic. With this payment method, customers wave their smartphone or special chip-enabled credit card over a card reader. There’s no cash changing hands or handling a customer’s card. The customer also doesn’t have to touch the card reader.
These “tap to pay” transactions are safer, and they’re faster. They also help to enhance the overall customer experience.
Giving customers another method to pay also provides convenience, enabling them to choose the payment method that works best for them.
Clearer View of Cash Flow
For businesses that accept cash and checks, owners have to make frequent trips to the bank to make deposits. If they’re busy, they might not make these trips as often as they need to, which can affect their cash flow management. Additionally, having to wait for checks to clear can slow them down significantly.
Digital payments can help businesses avoid these issues. When customers tap their smartphone, watch, or chip-enabled card, the money goes right into their business bank account. They get faster access to their money, and it’s easier for them to manage their cash flow. They can reconcile their funds more quickly, too.
Contactless payments are a safe payment method. Chip-enabled cards contain a tiny computer chip and antenna, which “talk” to the card reader during a transaction. The customer’s card sends a one-time code (token) without exposing their account information. It sends a new one with each purchase. Mobile payment services like Apple Pay and Google Pay use near field communication (NFC) to do the same.
Due to the way contactless payments work, they’re much safer than using a card with a magnetic strip. The data sent between the chip and the reader is encrypted, making it much more difficult to hack.
The term “omnichannel payments” refers to accepting payment through multiple channels, whether that’s in-store, online, or through an app. They play an integral role in numerous businesses across various industries. They go beyond offering multiple ways to pay, offering customers an integrated, consistent experience.
There are many ways a business can accept contactless payments, allowing them to offer more options to their customers, including:
- Online or in-store purchases
- Buying online and making an in-store return
- Buying online and picking up in-store (such as a food order or items from a grocery store or pharmacy)
- Ordering online with one card and paying for the product or service upon pickup with another card
With omnichannel payments, information flows seamlessly between all channels. That allows businesses to provide a much more pleasant overall customer experience.
Modernize With Digital Payments
The world is changing. More and more consumers are forgoing cash and paying for goods and services with digital payments. Businesses can still accept cash and checks, but one thing’s for sure: embracing digital payment methods is the way of the future and essential for business success.