Electronic bill payments (EBPs) continue to grow at a fantastic rate, with nearly 70 percent of Americans using online payments instead of cash — and an increasing number of companies adopting direct deposit over traditional checks.
It’s not difficult to see why EBP transactions are on the rise. The ability to process paperless payments helps to:
- Reduce administrative costs and paperwork. It can cost as much as $2 to cut an employee check, but direct deposit costs mere pennies. A company with 100 or more employees can enjoy savings of $2,000+ annually.
- Protect the environment. Fewer materials, ink, paper, and postage are required to send and receive e-payments.
- Increase transaction security. You can automatically verify all payments in real time, helping to reduce fraud.
But one of the biggest drivers behind EBP growth is transaction speed.
Many businesses discover that they’re "rich" on paper but "cash poor" in reality. It can take months to collect receivables — especially when they’re in the form of checks, money orders and cash. During that wait, some businesses struggle to meet cash-dependent expenses like payroll and overhead. When your company faces this type of bottleneck, you may be forced to take out merchant cash advances or adopt other corrective measures to keep your business afloat.
However, by incorporating electronic bill payments into your network, you can close this cash flow gap and focus on activities that actually add value (like servicing the needs of customers).
Where to Incorporate Electronic Bill Payments
In today's hyper-connected business culture, almost every transaction type lends itself to electronic bill payment. Below are some of the more popular EBP approaches:
- Online banking and mobile payments, both of which are growing at a faster rate than the Internet
- Automatic clearing house (ACH) payment processing
- Direct deposit and employee payroll
- E-commerce, for both products and services
Even fundraising and charitable contributions are ideally suited for electronic bill payments. Churches across the country are increasingly replacing traditional collection plates with electronic or mobile donation options.
Other Important Benefits of Electronic Bill Payments
The ability to send and receive electronic payments makes it easier to manage cash flow cycles. But EBPs offer other benefits that can help make your company more profitable:
- Receipts and tracking become automatic. This is particularly useful around tax season, whether you are a company, employee or consumer.
- Fewer errors and better documentation. You don't have to invest as many man-hours counting cash or managing ledgers.
- Reminders and recurring billing - future payments happen automatically without intervention.
- Increased impulse buying - with one-click shopping and virtual credits, you can reduce barriers to purchasing and grow your business’s profit potential.
The less time you spend on the administrative aspects of sending and receiving payments, the more time you can invest in profit-generating activities (like developing better products and services).
Implementing EBP in Your Business
At BluePay, our specialty lies in helping companies transition from paper-based processing to electronic bill payments:
- More information about our EBP solutions