To businesses, electronic payments may just be another type of customer touchpoint, but the changes in technology have proved that online payments have created and will continue to create tremendous opportunities for businesses that take advantage of the payment system.
The online payment system is a simpler, faster, and more convenient means for making payments. Despite these, many businesses have not embraced electronic payments, and it’s mostly because they do not understand the advantages it offers. Hence, this article highlights 5 reasons why you need an online payment system.
Online Payment System: Definition
Before discussing why you need an online payment system, it’s important to understand what online payment all is about.
An online payment system refers to the combination of two technological components namely a payment processor and payment gateway needed to process payments online. It also refers to the exchange of money through the internet; it allows for the payment of goods and services through electronic means.
How Online Payment Works
Typically, here is how an online payment work:
- The buyer places an order on the seller’s website
- The payment gateway collects the necessary information needed to complete the transaction
- The information is forwarded to the credit card company
- This is then forwarded to the buyer’s card company
- The financial institution (bank) confirms the order and informs the seller
- The seller sends a confirmatory message to the buyer
Now that you know what an online payment system is all about, let’s delve into why you need it.
Advantages of Online Payment System
Both e-commerce, as well as brick-and-mortar businesses, need to have and maintain a high cash flow rate to operate smoothly. For this reason, many businesses are embracing online payments. Electronic payment system enables businesses to save money and time, businesses are also able to process payments fast and easily this way.
With electronic payment systems, businesses can make instant cash transactions; it also helps you reconcile your account accurately. With this, you can eliminate accounting errors and be able to keep a more transparent record.
There are many other benefits of online payment system including:
Ease of payment
Online payments are faster and more convenient than traditional means of payment including cheques and cash. With e-payments, there are no location or time constraints. It enables you to make payments from anywhere in the world and at any time.
With electronic payments, you need not go to the bank to make payments; with just the clicks of a few buttons, customers can make payments for goods and services. Consequently, your customers will not have to go to the bank and stand in queue for long hours. Customers can pay instantly, and businesses will receive your payment instantly as well.
Besides, with online payment, customers can choose from a wide variety of payment options. People have their preferences and typically go for the fastest payment service and if they can get that from you, then you can be sure they will become loyal customers.
Increased Sales
Arguably the greatest reason to offer online payment systems to your customers is that it increases sales. While a great SEO strategy, targeted content, brilliant adverts, and topic clusters, providing online payment options can help convert visitors to your websites to buying customers.
But in selecting the best electronic payment system, note that the more payment options you offer, the more customers you can capture. Fortunately, there are tons of payment systems and gateways to choose from.
Provides a sense of security to customers
Online payment systems provide a sense of security to customers. This is partly because electronic transactions leave a digital footprint, providing legal evidence. For instance, for e-commerce businesses, payment is not sent to the seller unless the goods have been received by the client. This reduces the possibility of fraud being carried out by criminals.
Providing a secure and trusted electric payment system will boost customer confidence in your brand and consequently increase sales and business image.
Reach a larger audience
Research reveals that more than 56% of shoppers prefer cross-border shopping. Hence, offering online payment options will no doubt increase sales. Online payment options provide a means to reach a wider range of customers than those around your offline store. It enables you to offer your products and services to anyone through the internet without hassle. Besides, an online payment system enables customers to purchase items and pay directly through your website.
However, to ensure a seamless service, ensure you provide several delivery options. For instance, if your target audience isn’t in the country, then you should provide seamless international delivery services.
Increases Customer Retention Rate
To make online transactions, customers need to register on your app or website. In doing this, they are required to input their name, email address, home address, and phone number. This information can be useful for marketing purposes, thus leading to increased sales and customer retention.
For instance, email address information can be used for customer satisfaction surveys and delivery of the newsletter. You can ask customers to rate your product or send questions. The feedback gotten can then be for decision-making and to improve your products and services.
You can also send promo deals and offers through newsletters based on previous purchases. For instance, you could send promo deals on shoe polish to customers who previously bought shoes.
However, you are required to ask the customers whether they would like their personal information to be used for marketing purposes. While not everyone will consent, a significant number will and this can go a long way in boosting your sales; a feat that is easier achieved through online payment systems than traditional payment methods.
Conclusion
Electronic payments are shaping the business world in more ways than one. Online payment will ensure efficient account reconciliation, align with customers’ preferences, enable you easily scale up your business, and is easy to set up. Besides, cash is more difficult to manage, and such complexities aren’t good for business. Now that you know all the reasons you need an online payment system for your business, get on board and start making more sales!
