Paytech has become an integral part of company processes since the onset of the global pandemic, and the adoption of this technology has influenced every corner of operations for businesses large and small.
Here to discuss this transition, and how it has altered payment processing for those at the forefront of technological advancement is Ethan Anderson, the CEO and Founder, MyTime; a software that handles scheduling, point of sale, customer engagement and business analytics.
Over the past year, we’ve witnessed a major shift in how payments are collected and processed due to the Covid-19 pandemic. Online or e-commerce and mobile payments became preferred methods over in-person transactions. This change in behaviour led to additional enhancements and features such as paying via text message and even adding a tip during and after a service. When in-person payments were necessary, there was an additional push from the public to move to contactless card readers.
While these changes were not all directly related to the pandemic, it certainly helped to hurry the changes along. In 2018, a recent study from Pew Research showed that 3 out of 10 adults made no cash purchases during a typical week. Credit card loyalty points and cash back programmes have also encouraged card spending over cash, and the more a consumer pays with a credit card, the more perks they typically receive. These consumer behaviour changes mean a strategy change must occur in both small and large businesses in order for them to stay competitive and maximise revenue.
To attract new customers and keep loyal, returning customers, providing multiple, easy ways to buy and pay needs to be part of any organisation’s strategy. Modernising your payment infrastructure to include contactless payment options, mobile and online payments, and upgrading payment hardware at brick-and-mortar locations to provide a contemporary and seamless checkout experience will give that additional edge to your business over competitors. It’s not just nice – it’s necessary to appeal to younger customers. Many service-based retailers even collect payment up front to help minimise cancellations and streamline the checkout process.
Small Businesses: Negating the Initial Investment in Modern Payments
For small businesses, even a slight increase in payment processing fees coupled with a move away from cash impacts revenue, especially as companies are still struggling to ramp up to pre-Covid levels. This downside can be minimised over time easily, however, and the better news is that the most recent U.S. Consumer Payment Study done by TSYS (updated in January 2021) shows that consumers spend up to 83% more when using a credit card versus cash. Additionally, modern payment options are one aspect of providing great customer service that can be coupled with programmes like memberships, gift cards, referrals, and loyalty points to negate the initial investment in system hardware upgrades and increased fees.
Large Enterprises: Streamlining Payment Processes
Enterprise companies have a more complex challenge with payments because a change in payment strategy has a bigger impact across more areas of the business. For organisations with multiple locations, for instance, revenue has to be tracked at the corporate level across all stores, as well as at the individual level. Payment tracking, reporting, and reconciliation become more challenging the larger the company is. If a customer purchases a gift card at one location and it is used in another (or online), then one location needs to “pay” another. When you process thousands of transactions in a week or a day, there is no feasible way to properly manage finances unless a system-wide solution is in place; the standalone card processors from years ago don’t cut it in the modern world. While the upfront costs and maintenance fees may initially deter companies from making the investment, the payoff over time to an integrated card processing system is worth the upgrade.
Investing in a modern payment solution provides multiple direct and indirect benefits. Companies value efficiency, time savings, and reduced human error and they want to provide the best experience for their customers as possible. To start, typically these solutions are able to match or beat interchange fees as compared with a standalone processing unit, but it’s really the insights you can glean (and the business impact you can achieve) from a comprehensive system to better understand your revenue channels, employees, and customers which provides the most value. Automatic flagging via reports and dashboards can surface areas that need immediate attention, while high-performing areas can be studied and replicated across more locations. Understanding what areas are ripe for future investment is key to successful, long-term growth. The most successful payment solutions are using data science and AI to extract even more valuable information, and companies can take action in areas previously unexplored.
Unlocking Long-Term Growth and Customer Satisfaction
Customers expect more than just an announcement that you accept Apple Pay, or that they can now add a tip from their cell phone; they also need to feel safe and secure making these transactions. Modern, sophisticated solutions offer more secure payments as well as monitoring and risk mitigation. Companies and customers can rest assured that their personally identifiable information (PII) data is protected, and copious investments of people and money are put into monitoring any potential security breaches.
As companies strategise and plan for future growth, an overhaul on their payment processes may not initially make the top of the list; however, it’s recommended to have the conversation with your CFO and financial decision-makers. Implementing a modern payment solution instills a single source of truth for all your financial data, is integrated with multiple systems, and establishes a solid foundation for more accurate financial planning and growth.