Covid-19 containment measures resulted in acute cash flow problems for businesses that over-relied on non-digital payments. Because checks and invoices were put on hold, customers could not order or pay for products, so transactions critically slowed down. But most businesses have learned their lesson and digital payments are projected to grow to $ 6.7 trillion by 2023.
Even so, 1 in 5 small businesses doesn’t accept digital payments, despite their convenience and speed. If you’re still uncertain, here are a few reasons why you must embrace digital payments.
- They Provide More Payment Options for Customers
According to a McKinsey survey, the number of U.S. consumers using two or more digital payment methods rose in 2020 (jumping to 58%). Your customers are looking for more flexible payment options, and you have to provide them or lose business. Digital payments offer your customers many payment options like digital wallets, QR-code payments, and crypto payments. The best part is digital payments work for in-store, online, and mobile app transactions.
- They Enable Higher-Value Transactions
People no longer carry large amounts of money or make large cash payments. They are more comfortable paying huge sums digitally, with 27% willing to transact over $500,000 digitally. Therefore, you could be losing high-value customers by not embracing digital payments.
- Digital Payments Help Expand Your Customer Base
There is no doubt the world is becoming more connected. It’s now a must for businesses to have a website, an online store, and a heavy presence on social media. But if you set up all these and still require customers to pay for products or services in cash, you’ll lose out.
By embracing digital payments, small businesses can expand beyond their locality and meet the demand of online shoppers. You’ll be able to sell your products everywhere and receive payments. Additionally, you can transact internationally as customers can pay directly to your offshore merchant account using their preferred digital payment method.
- Improve Security
Digital payment systems make payments secure for you and your customers. Payments are instant and don’t bounce like checks. In addition, the data sent between the customers’ cards and digital payment services are encrypted for safety. Most digital payment providers have adopted Near-Field Communication (NFC) technology, so digital payments have become more secure.
- Save on Cash Transaction Fees
Many small business owners mistakenly think that cash transactions are free. But cash payments have both direct and indirect costs. Your business needs time and staff to count the cash, balance the till, and then make cash deposits at the bank. Also, you’ll need security systems and personnel. At times, money may get stolen or lost due to staff errors. All that time spent handling cash transactions can be used to look for more customers.
Embracing Digital Payments is a Must
Unless you want to limit the growth of your small business, embrace digital payments. They’ll help avail your products globally and offer your customers numerous payment options. To future-proof your business and guarantee its growth, you must modernize your payment system.