What are my electronic payment options?
With the increasing demand in our digital economy to make everything automated or electronic, do you ever find yourself wondering, do I really have to make this change, or can I keep making and receiving payments the way I always have? I think everyone can admit that there has definitely been a clear movement away from traditional paper payments to electronic payments. You might be thinking, she is really going to have to show me some true benefits before I make this shift to the electronic era.
I will, but before we look at various options, let’s look at some key benefits to adopting electronic payments:
- Checks are expensive, labor intensive, prone to errors and fraud & slow to reach payees
- Streamlined reconciliation in accounts payable and accounts receivable functions
- Reduce your back office expenses
Improve Operational Efficiency
- Reduce time spent on payment research
- Reduce back office staff time in writing checks and posting payments
- Single view of payments made & received
- Increases return on investment
Enhance Customer Service & Increase Customer Satisfaction
- Provide customers with many options regarding avenues of payment
- Enhanced convenience for customer
Gain Flexibility and Control
- You have control when payments are made and received
- Increases control & visibility of cash flow
So now that I have your attention on adopting electronic payments, what options do you have?
The most popular would probably be to allow your customer to pay with a credit card/debit card. Even though that can cost you a little in merchant service fees, in today’s day in time, if you don’t accept credit/debit cards, you will probably lose the business. There are many options that can easily be added to a smart phone or tablet and that could be set up without too much headache.
A second option (and one of my all-time favorites, especially for businesses) is setting up the capability to do ACH transactions. This would give your business the ability to pay vendors, offer direct deposit of payroll, draft customers, etc. ACH enables you to collect and disburse payments with the convenience of sitting at your computer.
A third option would be working with your financial institution to send out wire transfers. Wire transfers are typically your most expensive option when dealing with electronic payments, but for some industries, it is absolutely necessary. Your financial institution can make it work for you and the time you save might be worth the cost of outgoing wire transfers.
So the question is, where does it make sense for your business? The good thing is that you can slowly ease into one electronic payment option at a time. As you feel more comfortable you can add additional tools to your business toolbox.