Whether you run a physical brick-and-mortar operation, an online-only business, or a combination of both, adopting various payment methods, including digital wallet systems for your products or services, has become a necessity.
To accommodate the growing need, the digital payments sector is once again becoming crowded. As the number of payment methods increases, so does the merchant services industry, which is generally any service businesses use to accept and process payments. So, if you are running an e-commerce business, you have many options for accepting and processing online payments.
Industry players such as PayPal and Square remain on the recommended list for digital payments. Here’s how the evolution of digital wallet and mobile payment can contribute to small and medium-scale enterprises’ growth.
What are digital payments?
Digital payments are anything but paper checks or cash in. They represent the transfer of funds from the customer’s account to your account. Once upon a time, credit card transactions were not digital payments. Then point-of-sale machines were invented, and credit and debit cards went digital.
When you sign up with a digital payment processor, they collect your banking information and streamline transfers to and from your bank. When a customer makes a purchase, the processor collects the customer’s banking information then communicates with you and their bank to authorize the transfer of funds.
From your point of view, transactions, encryption, and permissions are automatic and invisible. You will see a change in your bank balance as soon as each transaction occurs.
There are several prime reasons to accepting closed loop wallet solution:
- Payments to your bank account happen faster than checks and even faster than accepting cash.
- Digital payments are more convenient for most modern consumers.
- No one can rob your store and run away with a bag full of digital payments.
- Many digital payment processors offer robust, real-time financial tracking to give you more and better control over your money.
- If you manage payments properly, digital payments can create a more predictable cash flow throughout the life of your business.
In addition, research shows that cash-only businesses miss out on sales if they do not accept digital payments. A 2018 Pew study found that 29% of American adults and 41% of high-earning adults make no cash purchases during a typical weekend. The number of Americans not carrying cash continues to grow each year.
Types of payment methods for small and medium scaled business
The first thing you need to do is decide what kind of payment your business can accept. Generally speaking, there are five payment options to choose from:
- Cash payment
- Check payment
- Credit card payments
- Online payment
- Mobile payment
Customers pay cash with bills and coins. Generally, you manage cash payments through a point-of-sale system. Until recent years, cash was the primary form of payment, but the popularity of digital payment options has steadily increased.
Checks are documents authorize banks to transfer funds from your customer’s bank account to your business bank account. Verifies the amount and date of payment and verifies the recipient’s account number and signature to authorize the payment.
There was a rift in paper checking in the 20th century. But with the widespread adoption of electronic payment systems, they have lost some of their popularity. eChecks, an electronic alternative to paper checks, is now commonly used for online payments.
Whether debit or credit card, plastic has become the primary way consumers pay for purchases today. According to the TSYS 2017 Consumer Payments Study, 77% of consumers prefer card payments. Paying by card is convenient and can simplify the checkout process. Also, it allows people to lend to large transactions, so most customers expect businesses to accept at least one type of card.
Online payments are transferred electronically. They use payment gateways to facilitate and authorize various payments, including eCheck, credit card, and direct debit payments.
Online payments are not limited to online businesses. Purchases can be made online at Brick-and-Mortar Stores using an application that stores credit and debit card information on a digital wallet or mobile device.
Contribution of digital wallets in the business growth
Now you better understand what mobile money payment solutions are, here are the factors that can contribute to the scalable growth of your small and medium scale enterprises.
They improve the customer experience
In a world where customer experience means, a digital wallet can help you achieve that goal. They will take specific steps involved during the checkout process.
No long-form filling. Don’t try to remember your credit card number anymore – you can tap the field, scan, or auto-fill. You complete the checkout process over the phone. “In addition, retailers can give their customers a discount code on the spot.
They give you complete control over your payment system
With digital wallet app development like Square, Stripe, and Bitcoin, “you can now customize your payment platform or eliminate third-party financial institutions. For example, if your business accepts cryptocurrencies like Bitcoin, the transaction is directly between you and the customer. This means you can set payment terms.
They can change credit cards
Millennials, the largest age group in the world, are not fans of banks. They do not need a credit card. “Instead, they prefer debit cards so that they are always connected to their funds. With digital wallets, millennials no longer rely on banks or credit cards to make purchases. ”
They are more secure
Security is the biggest hurdle when it comes to cryptocurrency wallet app development solutions. They are more secure. You don’t have to worry about leaving your credit card at a physical location. If you lose your phone, you can lock it. Biometrics such as fingerprint identification is used to verify purchases. Cryptocurrencies are created using complex coded algorithms that are extremely difficult to steal.
Access to real-time data
With the right digital payment solutions, you can access information such as “customer purchase preferences and purchase history. It allows you to split customers so you can send them product suggestions and include loyalty or reward programs.” You can also manage your cost and budget in real-time.
Keeps your business afloat
Want to gain a competitive advantage? Become an early adopter of digital wallets in your industry. Digital Wallet is easy to implement, speeds up the checkout process, and saves you money on processing fees. The fee payable for all types of cards is only 2.8 percent.
Get started with digital wallets and mobile payments.
To accept payments through a digital wallet, you need to find a digital wallet provider. The digital wallet on the dew is awesome. But if that doesn’t work for you, check out this list of the top digital wallet companies. You can be sure that you will find a provider that is better suited to the specific needs of your business.
You will need a point-of-sale terminal that can handle digital wallet app development company technology. This should not be a problem if your business is online. Your customers will create an account to purchase and securely store their payment information. If you’ve used PayPal or Google Wallet – you already know how it works.
But what about brick-and-mortar retailers? Small businesses with storefronts will need a POS system that supports the NFC chip. Your POS system can handle EMV chip cards, which were required from October 1, 2015, then you’re ready to go. If not, you can buy a scanner or reader for between $ 100- $ 500.