Electronic payments: how they can benefit your business
Payments are typically viewed as just another consumer touchpoint by businesses, but the significant shift in technology has proven that electronic payments will provide a plethora of options for organisations to expand faster. Electronic payments have undergone a rapid transformation as a result of continuous technological improvements.
Electronic payments are becoming a more smooth, quick, and easy way to make purchases. However, many businesses have yet to accept electronic payments because they are unfamiliar with the technology. In this blog, we'll go over the benefits of electronic payments and show you why they're an essential addition to your company.
What are electronic payments? Any digital payment, such as those made with a credit or debit card online or by ACH, is considered an electronic payment. When we talk about electronic payments in this article, we're talking about payments done via the internet.
Why should I implement an electronic payment system? There are numerous reasons why a business should accept electronic payments. Here are some of the main reasons:
Quick and easy payments
Electronic payments are significantly faster than traditional payment methods such as cash or checks. You are not restricted by time or place when making online payments. You can effortlessly make payments from anywhere in the world at any time.
E-payment systems have made it unnecessary to visit a bank to make a payment. Your consumers will no longer have to waste time waiting in large lineups at banks. They can pay you quickly and conveniently with an electronic payment app.
Better security
Tokenization, encryption, SSL, and other security features are available in electronic payment systems. Your consumers no longer need to enter their card information every time because they can save it or complete transactions using a One Time Password.
Transparent
When it comes to payments, transparency becomes a critical factor. When you use digital media to collect payments, maintaining transparency in your transactions becomes even more important. When it comes to electronic payments, you don't have to be concerned about a record of your payment information. You can also give your consumers the payment information ahead of time. So that there are fewer risks of misunderstanding.
Contactless options
During the COVID-19 pandemic, people began looking for ways to minimise human contact in order to avoid becoming infected with the coronavirus. As a result, the demand for contactless payments has grown.
Contactless POS terminals can be used in your business to eliminate the need for human interaction. In this approach, the payee simply needs to keep his/ her phone close to the terminal for his payment to be processed automatically. You can also enable your clients to pay with QR codes or One-Time Passwords (OTP).
Reduces the cost of processing
You must first subscribe to a card processor if you wish to offer payment services to your customers. In exchange for providing you with a payment gateway for processing, the processor will charge you a set fee. This is a hefty price tag.
If your business, on the other hand, uses an electronic payment system, you will not have to pay such exorbitant fees. All you have to do is pay your service provider a certain monthly fee.
What steps do I need to take to begin accepting electronic payments? You have two major alternatives if you want to accept card payments online, here are some of the options you can take:
Set it up on your own: Follow these steps if you wish to set up an electronic payment system on your own:
Open a merchant account
A merchant account is a required online bank account that stores the money a customer gives you while the payment is processed by the customer's bank. An ISO (independent third-party business) can also help you establish a specialised merchant account (Independent Service Organisation). These businesses collaborate with banks to provide merchant services, but they are usually less expensive and give better customer service.
Establish a payment gateway
Your website is connected to a payment processing network through a payment gateway. It's a piece of software that helps protect and validate a transaction, as well as capture your clients' card information and submit the charge for settlement. Paypal and WorldPay are popular choices.
Use payment facilitator Another option to set up an electronic system on your own is a payment facilitator (PayFac) which is a business that provides merchant services to allow businesses to accept credit and debit cards online, in person, and over the phone.
PayFac provides a combined merchant account. That is, a PayFac 'batch' your credit and debit card transactions with those of many other merchants, so they can all be processed at the same time.
Starting with electronic payment services does not have to be difficult. You may begin accepting credit cards online and provide a beneficial service to your consumers by familiarising yourself with the ins and outs of electronic payments.
Persona Finance has a team of expert accountants ready to help you with your company needs. We provide every critical accounting service that your business will want, from bookkeeping to company formation. Please contact Persona Finance at [enquiries@personafinance.co.uk] for further information on our services.