Over the last few months, the world of business has changed considerably. Businesses are having to change the way they work in order to remain successful and relevant. One-way businesses have done this is by finding new, more convenient, and secure methods of payment such as digital payments.
Businesses who accept digital payments are not only protecting the future of their business, but they can also help their business to grow too. This is even more true for businesses that rely on cash flow to survive
All too often, businesses have to wait over two days for payments to be cleared through traditional methods. However, digital payment methods can give businesses almost instant access to funds. If you want to know more about digital payments and why they are here to stay, then keep reading below:
What are Digital Payments?
A digital payment (otherwise known as an electronic payment) is the transfer of money from one account to another using a digital machine such as a computer, a mobile phone, or a POS system. This includes payments made with mobile money, bank transfer, and payment cards including debit, credit, and prepaid cards.
The Benefits of Digital Payments
There are several benefits of going digital, including:
- Access actionable data quickly – digital payment systems allow businesses to track and manage customer data more efficiently than ever before.
- Improved cash flow – digital payments happen almost instantaneously. This means that businesses no longer have to wait days for payments to be processed. However, to do this, you will need to ensure that you stay on top of your billing and invoicing. After all, all business owners know that accurate and clear invoicing helps to drive revenue.
- Convenient for the customer – payments can be done quicker than ever before. This helps to improve customer satisfaction and build trust.
- Competitive edge – a business with digital payment options will be in a better position to compete with their competition.
- Improve customer engagement – research has shown that businesses who provide their customers with digital payment options are more likely to get repeat business and have better conversion rates too.
- Security and transparency – digital payments enhance accountability and traceability. As a result of this, there is a reduction in theft and corruption.
- Cost-saving – thanks to an increase in speed and efficiency.
- Financial inclusion – it increases access to a range of financial services including credit, insurance products, and savings accounts.
- Inclusive growth – digital payments have been shown to reduce poverty. This is because they help unlock economic opportunities for people who would usually be excluded financially.
Why Digital Payments are Here to Stay
According to evidence, in 2017, almost 50% of consumers used a digital wallet. This number has now increased significantly, with more than 64% of people now admitting to using digital payments. What is more, 23% of people said they would prefer to use a digital wallet that handled all of their finances.
As you can see by the evidence above, digital payments are increasing in popularity. Businesses need to realize that although they may not prefer to use a mobile wallet, a growing number of their consumers do prefer this method of payment. Unless businesses want to take the risk of losing customers, it is a good idea to welcome this popular trend into their payment strategy.
For businesses in the fintech sector, the rise of digital payments is exciting, but the fundamental principles of business management still apply, even in a growth sector. This software for asset managers is an important tool for investment businesses, financial advisors, and other fintech players.
There is no question that the future of payments is here. Digital payments such as Contactless payments and payments supported by QR codes are just two options that are increasing in popularity around the world. Digital payment options will drive the future of commerce globally.