Unleashing Growth: Why Your Business Needs Digital Payments

We have all encountered “that customer” who is adamant about sticking to their traditional ways of doing things, even when it may not be the most efficient. Alternatively, you may be a business owner who follows the same mindset. However, it is essential to acknowledge that the world has undergone significant changes in the last ten years. 

If you are still conducting business in the same manner that you’ve ‘always done it’, you may be falling short of your customers’ expectations and possibly creating unnecessary work for yourself. This is particularly evident when it comes to accepting payments as a business owner. Keep reading to discover why it is crucial for your business to offer digital payment options.

To begin with, allow us to provide a real-life demonstration of how this method can be effective.

A practical example of making payments easy

For those who are skeptical about our claims on digital payments, here’s a simple demonstration: Disney World.

In the year 2013, Disney World introduced a new program, named “MagicBands,” which was met with disapproval from their shareholders. These MagicBands are compact gadgets, resembling the appearance and dimensions of a wristwatch, given to guests staying at Disney hotels and resorts. They are also available for purchase to park visitors.

The use of MagicBands provides individuals with a sense of security as it serves as their room key, park access pass, and identification for restaurant reservations within the park. Moreover, it is linked to their credit card, allowing them to simply “tap” the MagicBand to make purchases at various stores and restaurants within the park.

According to research, Disney World witnessed an increase in the average expenditure per room from $280 to $317 between 2014 and 2017. Despite the seemingly small difference, there are significant numerical details behind this shift.

• The spending has increased by 13%.
• Disney World has a total of 36,500 guest rooms in their hotels and resorts, with an average stay of six days.
• This indicates that Disney World had the opportunity to raise their spending by 1.3 million dollars every six days, resulting in a yearly increase of 81 million dollars.

The sole change in their business approach was to streamline the payment process for customers. No new product lines were introduced and their services remained unchanged. They observed a 13% rise in customer expenditures by simplifying the spending process.

Your services can generate higher revenue from your customers

According to a widely accepted belief, individuals tend to spend more money when using credit cards compared to cash or checks. This statement was supported by a Forbes article by Bill Hardekopf published in July 2018.

There are multiple factors behind this phenomenon. Firstly, individuals tend to overspend because less immediate discomfort is involved. For instance, if you only have $50 in cash to cover dinner and a movie with your partner, you are more inclined to select a restaurant within your budget and possibly bring your own snacks to the cinema. The reasoning behind this is straightforward: exceeding your budget would leave you unable to afford desired items, which is not a pleasant experience. On the other hand, when using a credit card, there is less chance of experiencing public embarrassment if you exceed your limit; only you and your credit card company would be aware.

According to the research, consumers who use cash are able to quickly recognize the value of their purchase as the money immediately leaves their hands and goes to the seller. In contrast, when using a credit card, consumers can focus on the benefits of their purchase without having to think about the cost until a later time. This results in a higher level of satisfaction with the purchase.

Speed up your payments using digital transactions

The underlying concept is simple: when tasks are simplified for individuals, they are more inclined to complete them. This applies to paying bills as well.

When using checks or cash, the receipt of money is dependent on other factors. This includes waiting for mail delivery if it is a check, and waiting for the bank to confirm the deposit before having access to the funds. For businesses with lower profit margins, such as design/build landscapers, this waiting period can greatly impact their ability to pay bills, cover payroll, and insurance expenses.

Repay, a Payment as a Service (PaaS) software, states on their blog that merchants who process card payments typically receive funding for those transactions within 24 to 48 hours, which is significantly quicker than the funding time for situations involving paper checks.

Reduce the amount of time spent on managing Receivables

The concept of offering digital payment options to customers has a trickle-down effect, which is logical. If your office employees spend less time manually verifying check amounts, adding them up, and reconciling them with invoices, they will have more time to focus on other initiatives. Take a look at this case study in which a business owner discusses how implementing digital payment methods significantly decreased the time it took for the company to receive payments.

Are you in need of conducting research on changing your CRM, phone system, or supplier for uniforms? Perhaps you want to make improvements to a specific process in order to enhance the satisfaction of your customers with your company. Have you been overlooking the documentation of your onboarding procedure for new employees? By reducing the time your office staff spends on A/R tasks, they will have additional time to focus on strategic initiatives that can propel your business to higher levels of success.

More satisfied clients

Promoting customer satisfaction leads to increased customer loyalty. It is not the goal of any business to simply be mediocre – we all strive to exceed the expectations of those we work for and serve. Prioritizing customer happiness should be a given, and digital payment methods can aid in achieving this.

This is the reason behind people’s happiness: everyone desires a task that is effortless and smooth to work with. By ensuring a seamless experience for customers, you can expect to witness significant growth in your business.

The process of collecting payments is not a pleasant experience for anyone. Most, if not all, of your customers have no intention of avoiding payment. They actually desire to fulfill their financial obligations. However, the constant phone calls, letters, and effort put into collecting money from them can be frustrating for both parties involved.

The following are two figures that could aid in understanding this:

• ACI reports that 31% of consumers are willing to change their payment channel or method for faster processing, which is an increase from 26% in 2020.
• According to research by Fiserv in 2018, 51% of households made automatic, recurring online payments in the previous 30 days, up from 45% in 2017.

A significant portion of customers would modify their payment method for a faster transaction. In the year 2018, more than half of families established automated payments for their utilities. I assume this percentage has not declined even during the COVID-19 outbreak.

Summary

Facilitating convenient payment options for your clients is beneficial for both your cash flow and your employees while also ensuring customer satisfaction.

This raises the question, why have you not started doing this?