Fact be spoken – An SMB that doesn’t offer its customers the option and convenience of digital payments in 2023 is definitely up a creek without a paddle.
In many countries, customers do not want to deal with businesses that don’t offer contactless payment options. Visa’s recent Back to Business study reveals that nearly sixty-five percent of small business customers want to continue using contactless payments even after the pandemic is over.
Agile small businesses have adopted new ways of doing business not only in the front office through digital commerce, but also in the back office with automated solutions for account payables and account receivables. As these businesses have experienced, and many more continue to recognize, digital payments and digitization of payment processes are not only good for business but increasingly crucial to stay in business, especially with customer-friendly regulations such as PSD2 coming into force.
B2B digital payments have become a necessity for SMBs to succeed in the modern business landscape. With its numerous benefits, SMBs must adopt digital payments to improve their cash flow management and gain a competitive edge.
Speed is a major advantage of digital payments, as they enable businesses to receive payments instantly. Additionally, digital payments provide increased security through encrypted transactions and protected sensitive information.
By offering digital payment options, SMBs can enhance the customer experience and retain customers who prefer the convenience of paying with credit cards or mobile devices. By embracing digital payments, SMBs can optimize their operations, attract customers, and position themselves for long-term success.
Business-to-business (B2B) digital payments can revolutionize the way SMBs operate in today’s fast-paced world. Traditional payment methods like checks and wire transfers can be time-consuming and inefficient. However, B2B digital payments can bring numerous benefits to SMBs:
By embracing B2B digital payments, SMBs can streamline operations, attract and retain customers, and position themselves for long-term success. Adopting digital payments is crucial in today’s competitive market.
Now, let’s talk about five ways digital payments and digitization improve your small or mid-sized business.
Digital payments are faster to process. A PayTech Revolution report by Deloitte reports digital payments to be more than fifty percent faster to process than traditional purchase-order processing. For business owners, faster payment processing directly translates to more control over receivables.
Upon receiving an invoice, a customer’s organization reviews the contents of the invoice, tallies the details with records, identifies potential disputes, and goes through multiple rounds of review before approving payment.
Suppliers can make this lengthy process infinitely easier for their customers with self-service portals that allow customers to keep track of invoices and make payments from within the portal after approvals. All the stakeholders can view the invoices and comments in one place, which makes the approval process easy to manage.
What is more, multiple payment options notch up the convenience quotient.
Digital payment options and processes eliminate reconciliation effort and reduce manual intervention and errors resulting in a minimum of three times higher cost efficiency than traditional purchase-order process cost.
Add to that the cost efficiencies from obviating the need to print and mail paper invoices and checks, and total cost efficiency gains could go as high as 500%. All this cost reduction naturally reflects in improved EBITDA.
Greater visibility into cash positions helps businesses make timely decisions about the movement of funds, and faster settlement with digital payments improves cash flow. Modern accounts receivable solutions that enable suppliers to slice and dice information and glean actionable insights empower business owners to make informed expenditure and investment decisions.
After nearly dethroning cash in the consumer market, digital payments are well on their way to replace check payments and paper-intensive processes in the B2B world. By providing multiple options such as ACH, credit cards, debit cards, and digital wallets, businesses can make it easier for their customers to pay their dues on time.
In the Visa study, nearly seventy-two percent of the small and micro-businesses surveyed reported expecting their customers to continue preferring digital payments in the future.
With multiple secure payment options on the market including Apple Pay, Square, Dwolla, and more, more millennials and boomers have driven the shift to digital payments than GenZ who were the early adopters of digital commerce.
A business that doesn’t provide the option of digital payments can easily be said to be preparing to walk the plank sooner than later. Embracing digital business-to-business payments and optimizing the back office is now the clarion call for action.
HighRadius RadiusOne E-Invoicing app is a cutting-edge software that can transform your business invoicing processes, making them more efficient, accurate, and cost-effective.
Our cloud-based e-invoicing software helps you automate the entire invoicing process, from generating invoices to receiving payments. Eliminate manual data entry and errors from your daily tasks that result in delayed payments, disputes, and inefficiencies. With HighRadius RadiusOne E-Invoicing, you can create and send invoices in seconds and receive payments faster, improving your cash flow.
With our intuitive dashboard, you can track invoice status and payment details in real-time, providing you with complete visibility into your invoicing process. Our software also provides robust security features, ensuring that all transactions are secure and compliant with industry standards.
HighRadius RadiusOne E-Invoicing is designed specially for small and mid-sized businesses. It seamlessly integrates with your existing ERP, enabling you to automate your entire invoicing process and reduce costs.
Connect with our experts to take a live demo of the E-Invoicing and payment solution from HighRadius.
Digital payments are more convenient because they offer faster, easier, and secure transactions. Users can make payments from anywhere at any time using their mobile phones or other digital devices without the need for physical cash. Digital payments also allow for easy tracking of transactions and can reduce the risk of fraud.
Some concerns of digital payments include security and privacy risks, the potential for fraud and scams, technical issues and system failures, and the possibility of financial exclusion for individuals without access to the necessary technology or financial services.
Digital payment is already becoming increasingly popular, and many experts believe it will continue to grow in the future. As technology continues to advance and more people become comfortable with digital transactions, it’s likely that digital payment will become the dominant form of payment worldwide.
Digital payments are sustainable as they eliminate the need for physical currency and paper-based transactions, reducing paper waste and energy consumption. They also provide opportunities for financial inclusion, allowing more people to participate in the formal economy.
Additionally, digital payments can enable efficient tracking and reporting, which can help identify and reduce fraudulent activities.
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