When the pandemic hit, the face of small business was changed forever. One of the multitudes of ways commerce has evolved due to COVID, is the demand for digital payments to ensure a contactless interaction. In addition to simple payment, shoppers are looking for creative ways to get the goods and services they’ve purchased.
For example, some want to buy online and pick up in store, order online and pick up curbside, or try a shirt on in-store and have the right size and color be waiting in their online shopping cart. Here’s information about small business solutions that can help you shape or start a payment strategy.
A brief history of payments
Physical currency of coins and paper money first emerged in 700 B.C. China. Paper checks appeared in Holland by the 1500s, but the evolution of payment systems didn’t explode until the late 20th century with the arrival of debit and credit cards. These days, there are a ton of ways to process financial transactions, from an online portal to smart terminals, to paying with your phone.
Types of payments
Here are the types of payments being widely used. Determine which is best for you and your unique business.
Contactless payments, also called tap-and-go and tap-to-pay, is done by tapping a payment card or device near a card reader equipped with contactless payment technology, without the need to swipe, enter a PIN, or sign for a transaction. These types of payments are extremely popular due to the pandemic due to convenances, speed, security, and safety.
Quick response (QR) codes, barcodes that store information read by a digital device, can be used for online links, document access, product id, loyalty programs and payments. The restaurant industry embraced this technology, tossing physical menus for QR codes, ensuring hygiene, safety, and ease.
A mobile wallet is a digital version of an actual wallet that holds credit cards, tickets, coupons, or rewards card information. Mobile payments made by phone (such as Apple Pay, Google Pay, or Samsung Pay) and other devices are growing by double digits annually, with mobile payment transactions expected to surpass $161 billion in 2021. The benefits of mobile payments include faster checkout that is touchless with increased security.
Smart terminals, also known as point-of-sale (POS) machines, allow merchants to swipe, insert or enter debit and credit card data for faster and more convenient checkouts. Many of these terminals also allow for nearfield communication (NFC) transactions that authorize contactless tap-and-pay options. POS systems can provide everything from data analytics to appointment bookings. To read reviews and features of POS systems available for small businesses, visit the software review site Capterra.
Benefits of digital payments
Upgrading to the newest payment systems helps your business stay up with consumer trends and can be a growth opportunity.
Shoppers expect the latest payment technology to be available to them, no matter how small. By establishing infrastructure for seamless payments, retailers can focus on other business building initiatives.
Manual payments can take up a lot of time, especially if you must address errors. Incorporating payment processing can be an end-to-end digital solution. This results in the information being flagged or synced automatically, as it flows through the process.
If your small business deals with cash, you must count every penny. But by going digital, transactions will be automatically recorded and tracked. This reduces effort and time required for manual transactions.
Reduce fraud risk
Criminals didn’t take a break during the pandemic and embracing digital payments can help you avoid fraud or theft. Digital payment options improve the security of payment information for not only the business but vendors and customers too.
Sending and processing physical checks manually can usually cost up to twice as much as it would to process the same payment digitally. And the time invested is just not worth it. Digitize your workflow so you can track and know in real time when invoices are approved and paid.
Better cash flow management
Cash flow is the net amount of cash and cash-equivalents moving into and out of a business. Cash flow shows how liquid a company is and indicates if the company will remain in the black. An end-to-end payment system can help you track and analyze this important metric. Visit the SmartBiz Loans Small Business Blog for more information on cash flow: Cash Flow Management Guide.
Technology moves fast these days so doing a little research can help you narrow down your payment options. Look to your competitors or other small business owners to see what they are using and how it works. Once you have a system, be sure to promote it to current and potential customers. Safety and security will always be important and should be highlighted on your website and in other customer communications.