Last editedJan 20222 min read
Cash is king. That’s been the commonly accepted truth for businesses for generations. After all, cash is liquidity. You don’t need to wait for it to be debited into your account, nor do you have to worry about miscellaneous charges nibbling away at your profit margins. You’ve either got it, or you haven’t.
But the tides are quickly changing. The pandemic has hastened an already prominent shift among consumers away from cash and towards electronic forms of payment. E-payments are multifaceted, fast, secure and convenient for both businesses and consumers. They can eliminate barriers to sale, improve cash flow and ensure transparency in your business finances.
Here we’ll look at some of the advantages of e-payments for businesses.
What are e-payments?
E-payment is the collective term for any electronic payment system. In the age of online banking and e-commerce, e-payments are an increasingly popular and versatile way to facilitate transactions.
E-payments encompass a variety of card present (CP) and card not present (CNP) payment methods, including both credit and cash payment systems. Different types of e-payment include:
Credit and debit card payments
E-wallets such as Paypal, Google Pay, Apple Pay etc.
Smart card payments
Store cards and store credit payment systems
If a payment is made without using cash or a cheque, it is considered an e-payment.
E-payment systems can be used online or in a physical store, making them a perfect choice for ecommerce and hybrid businesses.
What are the advantages of e-payments?
In an era where customers can make payment online or in person using cards and mobile devices, the advantages of e-payments speak for themselves. However, if you’re still of the mindset that cash is king, these indisputable advantages of e-payments might just change your mind.
Eliminate barriers and improve sales
47% of Brits do not routinely carry cash, and only 16% regard cash as their preferred method of payment. This means that businesses that don’t accept electronic payments could be missing out on a huge share of their chosen market.
E-payments are convenient and secure for the customer, and the more flexible you can be in the range of payment methods you accept, the less likely you are to miss out on sales from impulse buyers.
Antiquated payment methods like cheques can be problematic for cash flow, taking several days to clear. E-payment methods offer faster payment from customers at home and overseas. So you can improve your cash flow and get a clearer picture of your business finances in your reporting.
Secure and affordable
E-payment systems use sophisticated encryption to ensure that transactions are safe and secure. So your customers can do business with you with complete peace of mind. And with robust fraud-prevention measures in place, there’s much less risk of disputed payments putting a dent in your profit margins.
Speaking of margins, electronic payment systems have affordable and transparent pricing structures, so you can factor their charges into your own pricing structure without driving up costs for the customer.
Take recurring payments
Many businesses today take advantage of the subscription model. This enables them to secure customer loyalty in the long-term and enjoy long and fruitful relationships with a loyal consumer base. E-payments make it easy to take recurring payments and ensure frictionless transactions for subscribers.
Get the edge over your competitors
Every customer has a preferred method of payment. And if you don’t accept their preferred method, they’re likely to go to another business that does. By that same token, accepting a broad range of e-payment methods gives you a competitive advantage.
We can help
If you’re interested in finding out more about e-payments and how to use them to your advantage, then get in touch with our financial experts. Discover how GoCardless can help you with ad hoc payments or recurring payments.