Digital Payments for Business: Benefits, Solutions, Advice (2024)

As the demand for seamless transactions rises, digital payment solutions are transforming the way businesses handle money. Companies can start to cater to a broader customer base, get paid faster, and make large payments in an instant.

Discover the amazing value of embracing digital payments in our comprehensive guide, which also discuss how Wise Business can help you save when conducting international business.

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Ways that digital payments benefit your business

Let's dive into some key advantages of adopting digital payment technology.

1. Improved Efficiency

Digital payments can streamline your business by cutting down on manual processes and cash handling. In a study done by Mastercard, over one-third of small business owners in the US and Canada experience cash flow issues associated with late payments and slow processing times.

After making the shift to digital payments, 91% of small businesses said speed and security were their top reasons for change.¹ Going digital will give you more time and resources to focus on growth and customer satisfaction.

2. Enhanced Security

Digital payments offer a higher level of security compared to traditional methods. Among the 70% of consumers that prefer digital payment methods, 60% see them as more secure.² With features like encryption, tokenization, and biometric authentication, digital payment solutions help protect from fraud, theft, and human error.

3. Reduced Costs

When you adopt digital payments, you’re likely to notice a drop in transaction costs. The average bank cost of an online payment is one-third to one-half of a cash equivalent - which means more money stays in your pocket.³ Over time, these savings can add up and make your business more profitable.

4. Broader Customer Base

Using digital payment technology helps your business cater to a wider range of customers, including those who prefer cashless transactions. A 2022 survey by the Pew Research Center revealed that 41% of Americans don’t use cash for purchases in a typical week - up from 29% in 2018.⁴ By offering different digital payment options, you can attract and retain a diverse clientele, boosting your revenue in the process.

5. Faster Payments

Things move quickly nowadays. As 9 in 10 businesses had expected to initiate and receive faster payments by 2023, there’s no better way to fulfill this than through digital payments.⁵ Transactions are processed in a flash, which is super convenient for both businesses and customers. It's a sound route to improved cash flow for better financial management.

Digital payment types

As the world becomes increasingly digital, your business should stay ahead of the game by using a range of digital payment options for your payments, as well as the payments you receive. Here are some popular ones that can help your business thrive in today’s cashless society.

Credit and Debit Cards

Credit and debit cards have been around for quite some time, and they’re still going strong. Thanks to online shopping and digital wallets, these cards remain a convenient and widely-accepted payment method for customers in-store and online.

Mobile Wallet

Digital wallets are becoming all the rage these days. With apps like Apple Pay, Google Pay, and Samsung Pay, customers can securely store their card info and breeze through checkout with just a tap, scan, or using biometric facial recognition.

Online Bank Transfers

Gone are the days of writing checks and waiting for them to clear. Online bank transfers make it super simple for customers to send and receive payments directly from their bank accounts. Plus, with services like Zelle, Venmo, and PayPal, the process is made even easier.

Contactless Payments

Contactless payments allow customers to make payments by tapping their card or phone on a compatible terminal – no swiping or inserting required. They're perfect for those who value speed and convenience, and they're gaining popularity in the post-COVID world.

Invoicing Platforms

For businesses that provide services or deal with large transactions, invoicing platforms like Wise, QuickBooks, Wave, and Xero can be a lifesaver. These digital tools let you create, send, and track professional invoices, allowing customers to pay online using their preferred method.

Things to consider for businesses when making and receiving digital payments

When it comes to making and receiving digital payments, there are a few key points businesses should keep in mind.

Cross-currency payments

With many traditional banks and online payment platforms, you can get charged a mark-up for currency conversions and international fees on transfers. For many businesses, this can take on hefty fees. And, of course, this same thing happens to individuals paying your company. They either have to pay the fee upfront, or they pass that fee on to you.

All of these fees eat into your company’s margin. So, when doing international business, it’s good to go with a bank or financial services provider that can uses the mid-market rate. The mid-market rate is the mid-point a banker is willing to pay when buying and selling a currency. That’s what Wise Business offers you!

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Security

Good security ensures no one's money or sensitive information falls into the wrong hands. Encryption is one of the first security features you'll want to look for in a digital payment solution. It works to scramble data during transmission so that only authorized parties can access it.

Another key security measure is tokenization, a process that replaces sensitive data, like credit card numbers, with unique symbols or tokens. Even if these tokens are intercepted by bad guys, they're pretty much useless without the original data.

And let's not forget about authentication methods. Having multiple layers of authentication, such as passwords, PINs, or even biometrics like fingerprint scanning, adds an extra level of protection to digital transactions.

Costs and Fees

Different payment methods come with varying fees, so take the time to shop around and compare a few options. Some digital payment companies charge a flat fee per transaction, while others take a percentage of the transaction amount. Then there are those that mix it up with a combination of both.

Don’t forget to look out for other expenses too. There might be monthly fees, setup costs, or even charges for additional services like chargeback protection. A pro tip? Read the fine print. Make sure you fully understand the fee structure before making a commitment.

Integration with Existing Systems

To keep things running smoothly, you'll want digital payment technology that plays well with your current systems, such as accounting software or your online store platform. Integration can save you tons of time and effort - for example, syncing your payment data with your accounting software means no more manual data entry.

User Experience

A smooth and hassle-free payment process can leave a lasting impression on your customers, encouraging them to come back for more. The solution you choose should be easy to navigate and understand, both from your perspective and your customers'. A user-friendly payment system can make transactions quicker and reduce the chance of things like cart abandonment during online transactions.

In a world where first impressions matter, a sleek and professional-looking payment system can go a long way in enhancing your customers' overall experience.

Flexibility and Scalability

Flexibility and scalability should be high on your list of priorities because, let's face it – businesses grow and evolve, and so do their payment needs.

Go for a solution that can adapt as your business expands, whether that's by offering new payment methods or handling increased transaction volumes. Having a versatile digital payment system in place gives the reassurance that your business will continue to meet the needs of your customers.

Sending a large transfer?
You can send up to 1 million USD per local transfer. And up to 1.6 million USD per SWIFT transfer. For transfers sent from your Wise USD currency account, you can send up to 6 million USD. When adding money to your Wise balance, the limit is 6 million USD per transfer. Read more

Customer Support

Customer support might not be the first thing that comes to mind when you think about digital payments, but you won’t want to write it off. When it comes to managing your finances, you want to know there's a dependable team ready to help if any issues come up. Top-notch customer support can make all the difference when troubleshooting, setting up new payment options, or resolving disputes.

Compliance

A trustworthy digital payment solution should be compliant with industry regulations and standards. For example, the Payment Card Industry Data Security Standard (PCI DSS) provides guidelines to help businesses secure cardholder data and reduce the risk of fraud.

Wise Business: Make instant overseas payments easily and at low-cost

Looking for a simple, low-cost way to make instant overseas payments? Wise Business helps over 300k businesses save while conducting overseas transactions. This smart digital alternative to traditional banking offers digital payments that are both convenient, transparent, and instant.

Built specifically with small businesses in mind, Wise Business offers a ton of perks that make it super attractive for companies like yours.

Wise Business has no hidden fees or exchange rate markups. Plus, their international account is a game-changer for businesses dealing with multiple currencies. Whether you're paying freelancers abroad or accepting ecommerce payments from customers, Wise Business has got your back.

Some key features of Wise Business include:
Better visibility and organization of business finances. This is helpful for account reconciliations and audits.
Administration controls for users. It’s possible to allow team members to carry out specific tasks.
Receive payments from ecommerce platforms (such as Amazon or Stripe)
Create invoices using the Wise invoice generator or invoice templates.
Features for bill payment, including a QuickBooks Bill Pay connection. Bill payments will be synced, matched, and categorized in QuickBooks for simple reconciliation.
Batch payment options. This allows the fast payment of up to 1,000 people, by uploading a spreadsheet.

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Sources:

1. https://www.mastercard.com/news/press/2020/august/mastercard-study-shows-covid-19-a-catalyst-for-digital-b2b-payments-adoption/
2. https://www.businesswire.com/news/home/20230307005341/en/Fast-Convenient-and-Secure-70-of-Consumers-Prefer-Digital-Payments-Onbe-Future-of-Payments-Survey-Reveals
3. https://www.ijcb.org/journal/ijcb08q1a3.pdf
4. https://www.pewresearch.org/short-reads/2022/10/05/more-americans-are-joining-the-cashless-economy/
5. https://fedpaymentsimprovement.org/wp-content/uploads/pandemic-spurs-faster-payments-demand.pdf
6. https://www.trustpilot.com/review/wise.com