Remember when checks and cash used to be the only preferred methods of payment for the typical consumer? In this day and age, electronic payments in the form of credit cards, debit cards and electronic checks (ACH) are so commonplace that traditional methods of cash or paper check payments are rare occurrences in a retail or merchant environment.
Consumers and merchants in developed countries all over the globe have very quickly adapted to the way by which electronic cards and ACH payments are used to conduct business. The benefits are clearly advantageous for both sides as consumers and merchants are provided with easy and secure access to their funds. Credit cards, especially, are simply more convenient and offer lower consumer transaction costs, while cash or checks involve paperwork, hassle, and a potential waiting period. Similarly for merchants, cash and check handling is significantly reduced, thereby also reducing human error. Moreover, merchants expand their pool of customers who are guaranteed to pay. These days, having an electronic payment option is the norm and very much expected by both B2B and B2C customers – not having it is perceived as highly inconvenient.
According to the recent study by Moody’s Analytics, “Payment cards are not just convenient – they help stimulate growth for economies as well.” The study covered 56 countries that make up 93% of world gross domestic product, and over a five-year span–2008 to 2012—it found that “greater usage of electronic payment products added $983 billion in real (U.S.) dollars to GDP in the countries studied,” and “card usage raised consumption by an average of 0.7% across the 56 countries.”
The continued proliferation and acceptance of electronic payment solutions will only grow and become more diversified going forward, with the advent of many different ways for processing transactions electronically to cater to consumers’ and merchants’ needs for convenience and security. These ePayment solutions:
- Lower the average administrative cost of a purchase made, from $93 for traditional purchase orders to only $22 for purchasing card buys (RPMG Research)
- Reduce the need for staff that is devoted to accounts payable
- Create greater transparency into cash flow
- Provide encryption methods, tokenization and PCI compliance
- Allow for scheduled payments based on date or invoice
- Typically include an eWallet that allows customers to manage their payment methods
For merchants, it’s important to choose a VAR/ISV that has expertise in the ePayment industry and can offer you a solution designed to leverage your Dynamics GP solution, while having the capabilities to grow with your business.