Digital payment systems offer small businesses a host of benefits including convenience, security, and efficiency. They are also cost-effective and future-proof.정보이용료 현금화
Removing the need for cash and paper checks can significantly reduce the cost of a business and increase efficiency. But how can businesses implement and manage digital payments?
1. Ease of Payment
Digital payments allow consumers and small businesses to make transactions through a variety of devices, such as mobile phones/internet, point-of-sale (POS) terminals, and even digital wallet apps. They can also be used to transfer funds between accounts or to receive wages or other compensation. The technology underpinning such services is constantly evolving, with the advent of new delivery channels and contactless solutions like QR codes, as well as advances in data analytics and application programming interfaces.
The development of digital payments in low-income countries is often constrained by lack of physical infrastructure, such as the ability to connect to mobile networks, power supply for cell towers and other equipment, and transport networks. In addition, developing an adequate network of bank branches and payment terminals can be costly and take time.
Currently, the use of tap-to-pay for POS purchases is rapidly growing in the United States, with analysts predicting that such payments will reach $1 trillion by 2028. However, a growing number of consumers access this feature through platforms other than their preferred bank or retailer. Companies controlling mobile device operating systems, such as Apple and Google, play a critical role in this space. Any restrictions they impose could have outsized impacts on consumer choice and the development of a true open ecosystem.
A growing number of consumers, small business owners, and financial institutions are recognizing the value of open ecosystems. Such systems facilitate easy switching between different service providers and can enhance consumer choice by leveraging platform interoperability and data portability. Increasingly, policymakers and regulators are paying more attention to this potential for innovation, ease of use, and consumer benefit. However, more work remains to be done to ensure that open ecosystems are truly open and accessible to all.
2. Ease of Management
The ease of management that digital payment technologies offer can help small businesses streamline administrative processes. By integrating their systems with point-of-sale (POS) software and mobile devices, they can improve the quality of service for their clients while reducing paperwork and accounting costs. Additionally, the use of eChecks, which allow consumers to withdraw funds directly from their bank accounts, can also cut business costs and increase convenience for both parties.
However, some studies have found that a lack of technical infrastructure and perceived privacy threats can hinder digital adoption by micro-, small-, and medium-sized enterprises. A study by Shah and Dubhashi identified that the most common barriers to digital adoption included a lack of training and reluctance from workers to make electronic wage payments.
A growing number of people are choosing to pay with digital wallets, which are apps like Venmo and Zelle, as well as the near field communication (NFC) technology that is built into their mobile phones and smartwatches. These payment methods are popular among consumers because they provide a smooth and fast checkout experience and can be used to fund larger purchases. They can even be linked to a credit or debit card to give the consumer flexibility and security of managing their finances.
For a small business, selecting the right payment processor is vital to increasing profits and customer satisfaction. When comparing payment processors, consider transaction fees, pricing structures, ease of use, included features, and customer support. For example, some merchant providers charge a flat fee per transaction, while others assess a percentage of each purchase amount. Additionally, some processors only accept credit cards, while others can process ACH transactions, which are similar to bank transfers.
3. Transparency
In the digital age, consumers and small businesses expect payments to be mobile-first, fully digital, near instant and secure. Yet, many countries’ consumer and small business payment ecosystems have not evolved to meet these expectations. Some are held back by barriers to openness that inhibit data portability and platform interoperability. Others face regulatory roadblocks that prevent open financial services, including the use of innovative technologies such as blockchain and big data analytics.
The digital transformation of the economy brings new opportunities to enhance financial inclusion. For example, digitization can allow small-scale entrepreneurs to track transactions in real-time, making it easier to manage trade contracts and invoices. It can also lower administrative costs by facilitating digitized documentation such as receipts and account records. For small retail merchants, it can reduce the cost of tax compliance by making it easier to file employee taxes and social security payments online.
Another benefit of a digital transition is that it can increase the capacity of small-scale entrepreneurs to access formal credit. According to the World Bank Enterprise Survey, half of all SMEs in developing countries need a loan. However, only 33% of these firms have a formal line of credit. In addition, a high proportion of SMEs in developing countries do not have a bank account. This is a key barrier to accessing financial services because most loans are made by credit institutions. These institutions usually require substantial collateral and guarantors in the case of default.
In addition, a digital transition can increase the transparency of cash management. This is because digital transactions create an easily traceable electronic trail, reducing document-related fraud. It can also help reduce the risk of theft because entrepreneurs who receive digital payments can keep less cash on their premises.
4. Security
Payment systems are constantly changing, shaped by consumer demand, technological advances and new entrants. Consumers and small businesses increasingly expect payments to be mobile-first, fully digital and near instant at the point of sale (POS).
However, there are a number of challenges that have emerged in the field of payment technologies. These include economic imbalances, internal and external conflict, cost, government stability and corruption, retaining cheques and demonetization.
Consumers’ choice of payment technology largely depends on the level of trust they have in the security of the system. For example, a study showed that millennials prefer digital payments to cash because they feel the former is safer and more transparent than the latter [64]. Small-scale entrepreneurs also face difficulties in accessing formal credit, given the fact that many countries’ credit information bureaus are nascent or nonexistent. This often translates into high interest rates, hefty collateral and guarantors.
In addition, the costs of implementing digital payments can be prohibitive for small-scale entrepreneurs. For instance, many of them must invest in digital infrastructure and train their employees to use these technologies. This is especially challenging in low-income, unbanked or underbanked communities.
In order to promote digital payment adoption, it is essential to address these barriers. One way to do this is through open ecosystems, which allow consumers and small businesses to freely choose their preferred payment rails. However, open ecosystems are not easy to achieve. This is because dominant tech companies like Apple and Google play a critical role in determining consumers’ payment options through the operating systems they install on their mobile devices. Therefore, the CFPB is paying attention to how these market actors are fostering open ecosystems through platform interoperability and data portability.
5. Convenience
The convenience of digital payment methods is a key factor in encouraging small businesses to adopt them. In addition to saving time and money, these services also improve customer experience by increasing engagement with the business and the payment process. These factors are particularly important for micro and small businesses, who often have limited resources and face a number of challenges when it comes to adoption and use of digital payments.
Convenience is a relative concept that depends on the specific context of the service. It can be characterized as any procedure, product or service that increases ease in accessibility, saves resources (such as time, effort and energy) or decreases frustration. Modern convenience can include a range of things, from frozen meals that eliminate the need to cook to online shopping that removes the need to travel. In contrast, real convenience involves reducing the amount of physical effort required for unpleasant tasks, such as getting cash from an ATM or visiting the post office.
In order to be convenient, a payment method must be easy to use and accessible to the target audience. This can be achieved through the use of mobile phone apps, online payments, QR code payments and other electronic methods that allow for secure transactions without the need for a physical credit card or paper checks. These types of digital payments can help to boost financial inclusion and promote the growth of small businesses by removing barriers to entry for low-income consumers. In addition, they can facilitate the growth of savings and commitment saving behaviors through the use of nudges such as automated deposits, scheduled text reminders or positive default options.