Last editedApr 20235 min read
Digital payment solutions enable businesses of every size and type to take payments from customers at any time and in any place. Whether your business is based online or in a bricks and mortar location, taking digital payments will enable you to remove pain points from the payment system and ease friction for customers.
The best digital payment solutions also enable customers to link the process of making a digital payment to a payment method of their choice, making it far more likely that they’ll choose to shop with you in the first place.
In this article we’ll look at the best digital payment solutions available on the market and outline just what they could do for your business.
What is a digital payment solution?
A digital payments solution is technology which enables money to be transferred from one account to another. The easiest way to understand digital payments is to think of them simply as means via which, using electronic or online media of one kind or another, a customer is able to make a payment and instantly transfer their money into your account as a merchant. Digital payments of this kind come in many different forms:
Electronic Payment Systems – these use digital technology to facilitate transactions between two parties. Electronic payments can include more traditional bank transfers, newer buy-now-pay-later systems and even eChecks.
Mobile Payment Apps – these enable individuals to make payments directly to merchants or into business bank accounts via their mobile device, such as a smartphone or tablet. It’s hard to overstate the importance of mobile payment apps to any business. According to figures published on the Business of Apps website, the volume of transactions using mobile payment apps in 2021 was $1.7 billion, a massive 27% increase year on year, with more than 2 billion people making use of mobile payments globally.
Mobile Wallets – mobile wallet is the name given to a platform which holds payment card details on a mobile device. Mobile wallets are becoming an increasingly popular digital payment solution because of the enhanced levels of security and convenience they offer to users. According to Statista, global mobile wallet transactions are predicted to rise as high as $9,419,619million by the year 2025.
Contactless payments – the use of contactless payments rose hugely during the COVID-19 pandemic and consumers came to value the convenience. Contactless payment technology works via Near Field Communication (NFC) technology embedded in payment cards, or similar functions delivered via mobile wallets like Apple and Samsung Pay. Technology aside, contactless payments provide excellent small business payment solutions as they work in a way which removes virtually all of the friction from the process of paying for goods or services.
Key benefits of digital payment solutions?
When we’re analysing the benefits of digital payment solutions it’s worth looking at things from the point of view of the customer and the merchant. What soon becomes apparent, however, is that these two points of view often converge. Both customer and merchant will enjoy the benefits of small business payment solutions such as enhanced security and speed of payment, so it’s worth noting the key benefits:
Speed – a digital payment can make its way from the account of a customer to that of a merchant in a matter of seconds. Because it is digital in nature, both parties will receive instant confirmation of the payment, and an electronic record will be created which makes it easier to track money travelling through a business. The other big advantage of digital payments in terms of speed is that it takes just the same time to take a payment from a person standing in a bricks and mortar store as it does from one accessing your website from a location thousands of miles away.
Security – digital payment solutions have security factors built into every stage of each transaction. Tokenization helps to keep information such as credit or debit card numbers secure, encryption means that the payment details are never publicly available and multi-factor authentication helps to protect customers from the risk of someone else accessing their digital payment solutions.
Flexibility – by working with a payment processing partner like GoCardless your business is able to offer maximum flexibility to customers in the form of digital payment solutions. To put it simply, you can be where your customers are and take payments in the way they want to pay. This kind of flexibility will massively increase the potential size of your market and drive customer satisfaction higher.
Best 5 digital payment solutions
There are so many digital payment solutions available that it’s difficult to pick the very best. When analysed in depth, however, we feel that the following digital payment solutions provide the best blend of security, convenience and flexibility:
Paypal can be used to pay for purchases or to transfer money to friends and family. It works by linking to the bank account, debit or credit card chosen by the user and transferring money from that account without the recipient being able to see details such as card or account numbers.
Easy to set up and use
Personal financial information remains encrypted
Victims of fraudulent transactions are easily able to claim their money back
There are no fees for sending money to friends and family
Anyone sending money as a business transaction is charged a fee
There is a 1% fee for gaining instant access to your money
If your account is ever frozen, the onus is on you to prove a lack of wrongdoing
Apple pay works by enabling users to register their credit or debit card and fingerprint on their phone. Once this is done, the phone can be used in place of the card for contactless payments.
Once it’s up and running, Apple Pay allows for very quick and simple payments
The credit or debit card data in question is securely stored within the phone and never made available to people being paid
Apple offer a high reward option for people using credit cards
The user needs to own an iPhone 6 or above for the system to work
The facial recognition technology used for Apple Pay can sometimes still be a little glitch
From the point of view of some merchants it is quite complex to set up
Google Pay is a digital wallet solution which enables users to load the details of payment cards onto their mobile device, and then use the mobile device to make payments. As well as enabling in-person payments, Google Pay facilitates online payments
Google Pay is compatible with both Android and iOS devices, meaning that most customers will be able to make use of it
Google Pay offers security in the form of tokenisation and assigns a unique code to every payment, making it easier to track
Customers can also use Google Pay to store documents such as tickets and boarding passes
For in-person payments, the merchant needs to have installed an NFC terminal
Google Pay isn’t yet as widely accepted as some other digital payment solutions such as PayPal
Depending on the payment method linked, a Google Pay payment can take up to five days to land in a merchant's account, registering as pending before then
Stripe is a payment infrastructure provider which integrates payments to a merchant from a broad range of sources.
Integration across the system within an individual business, from invoicing to handling subscriptions
Is utilised in many countries across the globe, enabling merchants to reach wider market places
Offers a range of add-ons to make life easier for internet businesses
We are the world leader in handling bank payments, with a suite of solutions enabling merchants to offer the widest possible range of payment options to their customers.
How can GoCardless help
GoCardless is a digital payment solution that can accept payments from a range of sources as one-off occurrences, as well as allowing merchants to take payments via recurring bank debits or using bank pay technology. The technology we utilise was purpose built for dealing with bank payments, making it easier for merchants to reduce the fail rate of the payments customers try to make and cut incidences of fraud. Our customer support service is also the best in class, meaning merchants know they are supported every step of the way, and our ability to support 100% of payer preferences using either cards or digital wallets.
We can help
GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.