Businesses are increasingly making the switch to digital payments business for some reasons, including higher customer satisfaction, faster processing times, and reduced costs. The main benefit is increased safety for both the consumer and the merchant. Other benefits include greater operational efficiency, reduced need for cash-on-hand, and better customer analytics.
Merchants that use digital payments have a higher revenue per customer and a better return on investment. They also have less theft and fraud in their stores since the customer’s credit card data is not leaving the premises. To implement a digital payment solution through a digital payment process, you need to choose a payment gateway, install a plug-in or set up an online store if you are selling goods and choose a digital wallet if you are accepting payments from your customers.
You can also choose from integrated solutions with a technology partner that include all of the above components into one payment gateway.
Digital Payment Solutions
Today, there are several online payment solutions for merchants to choose from.
Wireless devices that work with mobile phones or smartphones
One popular device is Square, which also uses a smartphone. The mobile phone is configured for card payment. Square can be configured to send email receipts to customers automatically. There are also wireless credit card terminals that work with smartphones, laptops, and desktops. Such devices include PayPal Here and iZettle. Devices that plug into smartphones to allow them to be used as mini credit card terminals include PayPal Here and Square, which both have receipt printing capability built-in.
Virtual card readers installed in cash register main boards and POS systems
The chip card is swiped through a machine. Since the payment processor maintains the security of sensitive transaction data, consumers feel safe using this digital payment solution, especially if it is integrated with the mobile phone application. Digital payment services are increasingly popular with small businesses that have limited cash on hand or prefer not to maintain large amounts of cash since they may be susceptible to theft or physical damage.
EMV (Europay, MasterCard, and Visa) chip cards
These are universally accepted cards that use advanced encryption methods to ensure the privacy and security of cardholder data. Merchants can purchase these cards in bulk, which reduces the cost per transaction compared to the other payment methods above.
Credit card readers
These have a magnetic strip that is swiped through the reader. This type of card is typically accepted at large retail stores and restaurants. Most retail companies strive to provide different payment methods so customers can choose the most suitable one, which is challenging for accounting and data security. Handling common operations like refunds, chargebacks, and sales discounts require a solid system with integrated payment gateways and external components for analytics and fraud detection. To streamline these processes, companies build custom solutions with payment systems development.
Businesses that are considering using digital payments should first determine the benefit they will receive from this change. They should calculate their costs to purchase and install equipment as well as maintenance costs, including staff costs for training and support.
Types of Digital Payment Methods
A credit card differs from a debit card in that the consumer does not have to send the payment from their bank account directly to the merchant. Instead, it is transferred through a central processing network, which does not require a debit transfer. The credit card company then issues a chargeback for any fraudulent charges.
Debit cards function much like credit cards and are generally accepted anywhere a significant financial institution exists, such as ATMs or banks. However, there are some differences. When an account holder sends money to the merchant, their bank sends money from the account to the merchant and subtracts any charges from it. Debit cards work through a vault that receives funds at a pre-determined time and then credits them back to the customer’s bank account when they are ready.
eChecks are a Paypal-like payment method that is paid through a personal bank account. It is a cheaper option than a credit card, debit card, and even electronic checks, which require expensive processing fees. The main benefit is that it works through web banking and personal accounts, making it easy to set up.
The Federal Reserve initially created electronic checks in 1974 to help reduce the cost of receiving money from American banks. It is an online version of a paper check and works similarly. The main difference is that the money is electronically transferred rather than physically printed out by a bank.
Amazon’s mobile app works like a traditional credit card and as an eCheck. This means that Amazon Pay can be used to pay for merchandise at any merchant that accepts Mastercard. It also means that Amazon Pay is integrated with the Amazon account, allowing customers to purchase goods from other merchants. However, it must be used within the Amazon product page rather than the actual checkout process.
PayPal is a digital wallet option and one of the online payment platforms that act as a payment processor through the internet. The main advantage of using PayPal is that it keeps your credit card and bank account information secure on the company’s servers rather than on the merchant’s servers. This gives you additional protection from cyber-attacks. However, many merchants do not use this feature directly and instead redirect consumers to their bank accounts or credit cards during the checkout process.
The Future of Payment Technologies
The future of payment technologies looks to be very promising. Mobile payments are expected to increase rapidly, especially with the advent of wireless smartphones and digital wallets. Wireless smartphones have already become an integral part of everyday life, and the level of sophistication continues to improve.
Smartphones make it possible to download financial applications onto your phone and use it as a form of payment anywhere that you can use a card. The applications can be accessed by scanning the screen when the phone is presented or using physical buttons on the device.
This means that there will be more software updates in the future that allow phablets to have integrated payment technology. That means that you can pay for goods and services with your phone anywhere that a credit card would work. This would also mean that using your phone as a payment method would not require syncing to a specific merchant’s secure page.
The number of small businesses accepting mobile payment types is also anticipated to increase significantly simply because it is easier for a customer to deal with a mobile payment than to write a check.
In conclusion, Digital payments are becoming a more common form of payment than traditional forms, allowing people to have easier access to products and services. Businesses will also have the ability to keep consumers and customers more satisfied, knowing that payments are received quickly, safely, and securely.