Electronic payments are seeing considerable growth because they provide tangible benefits to consumers, including quicker access to funds than paper checks provide. Yet, research by The Federal Bank of Minneapolis indicates that businesses remain behind the curve in shifting to electronic payments; consumers have abandoned paper checks at five times the rate of businesses.
Here’s a look at some common barriers business face when it comes to electronic payments, and how to overcome them.
Proactively overcome reconciliation challenges
When a paper check is issued, both payer and recipient have the opportunity to include as little or as much detail as they wish for payment reconciliation, including the ability to identify correlated invoices, goods and any reasons for a cost adjustment — particularly in a business-to-business transaction. By streamlining your invoicing processes, you can help boost the likelihood of electronic payment remittance: Ensure that every invoice clearly indicates the goods and services being billed, and has a unique alpha-numeric number the payer can reference in the memo section of the electronic payment. If a cost adjustment or special discount applies, make sure your issued invoice clearly reflects the total amount due.
Give vendors the tools to pay electronically
Encourage electronic payments by providing customers with easy access to tools that facilitate them. In addition to selecting a credit card payment processor that allows you to use your smartphone or tablet device to process electronic payments anywhere — including over the phone, or at an offsite location away from your business — equip your website with a secure payment gateway and checkout page that customers can access to process an electronic payment. Clearly reference the Web address of the electronic payment page on your invoices so payers know exactly how to remit online payments, and describe the methods of payment you accept there — including credit or debit cards, along with details regarding the amount of time it will take for the transaction to post to the payer’s account.
Give them a reason to believe
Using the communication channels your customers already prefer, craft a series of notifications (whether delivered by mail, email or phone), announcing that you accept electronic payments, how they work — and why they’re beneficial. Proactively address how the processes to which payers are accustomed may change with electronic payments (for example, a payer who uses your website’s online checkout may be emailed a receipt or a PDF document confirming the transaction). Continue to message additional incentives for customers who are slow to adopt, which may include a limited-time discount for those willing to utilize electronic payments.
Electronic payments can streamline operations and improve cash flow for business owners, but it may require education and assurance to move customers to adopt it as their payment method of choice. By proactively addressing the reasons behind customer hesitancy, you can formulate a communications plan to eventually move more of your transactions to utilize electronic payments.
If you're not sure how to get started, click Get Started Today! to have one of our experts contact you or see additional resources below to learn more: