There was a time when cash, cheques or credit cards were the main options when it came to customers paying for goods and services. But those days, in the main, are long gone now, thanks to the invention of a suite of innovative modern payment technologies, such as EFTPOS, contactless payments, digital wallets, OSKO and even cryptocurrency.
Indeed, according to the RBA, Aussies make, on average, 730 electronic transactions every year, and that number is only predicted to increase over the next few years.
Subsequently, as a business, and particularly a retailer, it pays to adopt as many modern payment technologies as you can because it can improve efficiency and enhance your overall customer experience.
In addition, it can also provide you with several financial benefits, eight of which we will outline in this post.
1. Reduced Transaction Fees
Every business needs to make sales to survive, but if you are currently facilitating them through electronic payment processors, then you’ll be well aware of how expensive this can be.
Depending on who your provider is, you could be paying up to 1.5% of the overall value of the transaction for processing credit card payments, which, over the course of a year, can really add up. (It would be $1800 if you make $120,000 in sales in the year).
However, some EFTPOS machine providers like Smartpay are now providing companies with incentives like no monthly terminal rental or transaction fees if you process sales of more than $10k a month.
Therefore, it might be worth making the switch to them to save your operation a bit of money.
2. Faster Payment Processing
If your company was established before 2010, you’ll probably remember the phrase ‘three to five business days’. That was the standard response given to anyone who asked how long a cheque would take to clear, which could have caused problems for your cash flow.
Thankfully, modern payment systems, in particular those that offer real-time payment platforms and blockchain solutions, enable you to get your money either instantaneously or in a few hours.
This allows businesses to access their funds faster, manage their finances more effectively, and benefit from a reduction in the amount of interest they accrue on existing credit card balances or loans.
3. Better Fraud Protection
According to the LexisNexis True Cost of Fraud Study, Australian businesses incur an average cost of $3.68 for every dollar that is lost to fraudulent activities. Much of this is derived from chargebacks and legal fees.
That said, modern payment technologies are countering this by implementing advanced security measures, such as encryption, tokenization, and biometric verification. These measures are designed to significantly reduce the potential for fraud to happen in the first place, which, therefore, saves you money in the long run.
4. More Streamlined Operations
Manually processing payments and undertaking traditional accounting practices usually takes up a lot of resources, which can impact your bottom line in terms of administrative and operational expenditures.
But, as modern payment technologies can seamlessly integrate with accounting software and customer relationship management (CRM) systems to automate tasks like invoicing, payment tracking, and reconciliation, they are able to save businesses a lot of time and money.
Subsequently, this allows businesses to better allocate their resources across their operation in a way that will make it more productive and efficient.
5. Greater Chance of Repeat Business
The modern customer wants speed, security and convenience when it comes to paying for goods and services, and if they don’t receive it, they are not likely to buy from a business again.
Therefore, the more options your company can offer them to process their payments – such as mobile payments, contactless cards, and buy-now-pay-later services – the more likely they are to retain a favourable impression of your company.
As a result, this should translate to great customer satisfaction, loyalty and repeat sales.
6. Access International Markets
Thanks to the rise of e-commerce and, in particular, modern payment technologies, businesses are no longer confined to domestic markets.
Instead, as these systems support multiple currencies, they can expand their potential customer base overseas and open up new revenue streams they wouldn’t normally be able to exploit without having to incur international transaction or currency conversion fees.
7. Cheaper Invoicing
According to the Australian Tax Office, it costs businesses between $27 and $30, on average, to send one single emailed PDF or paper invoice. That contrasts to just $10 to send an eInvoice.
While your actual savings will depend on your operational processes, how many invoices you send per year, and the time you save in managing your invoicing, you can end up cutting costs significantly by adopting modern payment technologies that automatically send them for you.
8. No Costly Human Errors
In the workplace, anyone can make a mistake. But if they happen when an individual is processing manual payments it can be very costly to the business over time. Particularly if it has resulted in them making double payments or not requesting invoices to be paid.
The great thing about modern payment technologies is that they eradicate the likelihood of these errors happening in the first place by automating the process. This ultimately cuts out the potential for human error and thus saves your company money.