The digital revolution is well underway, with technology embedding itself in every aspect of our lives. Unsurprisingly, payments are no different. Cash used to be king, but not anymore — going cashless is now king.
According to a 2019 study, 73% of all payments happened in-person at the point of sale (POS), and the majority of those were digital payments. Plus, 60% of consumers now cite the ability to make digital payments as an important factor when deciding where to shop.
Whether it’s through contactless payments, virtual terminals, mobile apps, Apple Pay, or Google Pay, businesses and customers alike are flocking to join the digital ecosystem.
This article will explain what digital payments are, how they can benefit your business, and how to accept digital payments.
What Is a Digital Payment?
A digital payment is a cashless payment from one bank account to another made through a point-of-sale system, on a mobile device, or online. It can also sometimes be referred to as an electronic payment.
Here are the types of digital payments that can be accepted.
Debit and Credit Cards
This is the quickest, most effective, and most popular digital option. Debit and credit cards are preferred by 80% of consumers, according to a 2017 TSYS study.
And debit and credit cards go beyond the traditional swipe through a credit card machine. As a business owner, you’ll want to have a credit card reader that can support the EMV chip cards as well as contactless payments.
Some credit card companies, like Mastercard and Visa, are even using biometric technology to add an extra layer of security. Think of it like the Touch ID feature on some Apple phones and tablets. In order to verify the cardholder’s identity, the card’s sensor reads the customer’s fingerprint while the purchase is being made.
Luckily, this latest technology is compatible with EMV-enabled credit card terminals.
E-Checks Through ACH Processing
E-checks are really just the digitized form of traditional checks and can be used to pay by check online. The customer just inputs their information — account number, name, authorization, routing, amount — on an online payment form. It’s a great option for small businesses because it’s far safer than receiving a check in the mail.
Mobile Wallets and Digital Wallets
A mobile or digital wallet securely stores a customer’s payment details on a device or via an online service. It makes it possible for a customer to pay with their credit card without having it physically present. Mobile and digital wallets include services like Apple Pay, Google Pay, Samsung Pay, and PayPal.
These types of payments can be accepted both online and in-person, if you have a card reader that supports digital wallets.
Digital wallet users are an important market to capture. Four in five people, according to NerdWallet, use a mobile payment app or digital wallet. This is particularly true for people under the age of 40.
What Are the Benefits?
Businesses and customers alike can enjoy a wide range of benefits when using digital payment methods.
The average paper-based B2B payment cycle takes 35 days to complete. Digital payments, however, can be completed on the same day. This eliminates data errors and heightens accuracy. It also helps small business owners get paid faster.
In addition, digital payments can make it easier to track inventory, monitor cash flow, budget, and gain invaluable, data-led business insights on an ongoing basis.
Digital payment methods are the lifeblood of a paper-free economy. The inevitable transition toward a cashless society will reportedly have an incredibly positive impact on the environment.
Most paper-based payment methods have higher fees and “soft costs,” such as bank fees, manpower, materials, and postage. It’s estimated that one paper invoice costs a business between $12 and $30.
By accepting digital payments, you can cut the costs of paper invoicing and get paid quicker, which can increase your bottom line.
How to Accept Digital Payments
Once you’ve decided to include digital payment options in your business, you’ll need to figure out which methods of accepting them are right for you. Here are the options you’ll want to consider.
In-Store Credit Card Machine
If you’re a brick-and-mortar retailer or service provider, you’ll need a credit card machine for your business. Ideally, you’ll want a machine that can swipe traditional cards, read chip-enabled cards, and accept contactless and digital wallet payments.
Mobile Card Reader
If you conduct business in-person but not within a shop or fixed location, then you’ll want to look into accepting credit cards on-the-go. You can turn your mobile phone or tablet into a credit card reader by using a mobile app from your credit card processor.
In an increasingly e-commerce-dominated society, having an online presence (and being able to take digital payments) is a modern-day imperative. An online store or a “Pay Now” button on your website allows you to accept payments and generate new orders 24/7. It gives customers the ability to use their debit and credit cards directly on your website.
Over the Phone
You can even take digital payments over the phone. If your credit card processor provides a virtual terminal, a customer can give you their debit or credit card information over the phone. This can be a helpful option for customers who aren’t web-savvy or aren’t able to pay in-person.
This is a great option for a service-based business. If you already send out customer invoices, why not send them via email instead of snail mail?
With emailed invoices, you can exponentially increase the speed and ease by which your customers pay for services. Instead of going through the tedious process of writing a check (and subsequently rummaging around their house for a stamp), the customer simply pays by debit or credit card.
How Can Nadapayments Help Your Business?
Nadapayments makes it easy for your business to accept different types of digital payments — whether in-store, on-the-go, online, over the phone, or through emailed invoices. With Nadapayments’ Wi-Fi EMV Quick Chip machine, your customers will be able to pay with:
- American Express
- Apple Pay
- Google Pay
- Contactless payments
In addition to the credit card machine, you’ll also have access to a virtual terminal for online payments and an app for mobile transactions.
The best part is Nadapayments will save your business money. Normally, credit card companies charge a fee every time a merchant processes a credit card payment.
But with Nadapayments’ surcharge program, if a customer chooses to pay with a credit card, the 3.5% transaction fee is charged to the customer — not the business. A customer can still pay with cash or debit if they want to avoid the surcharge
The end result? Increased profits — whether you’re a tanning salon or an auto repair shop.
Go Digital in Your Business
Digital payments include credit cards, debit cards, e-check, and mobile wallets. By accepting these types of payments, you’re giving your customers the payment options they prefer.
Plus, it expands the ways you can receive payment from your customers. Instead of relying on customers paying with cash and checks in person or by mail, you can also take payment over the phone, on the go, online, and through emailed invoices.
If you’re ready to begin digitizing your payment processes, reach out to Nadapayments to get started today.
How do I accept digital payments? ›
- Online payment service provider. If you run a service-based business or sell products online, an online payment service provider might be the most common way you get paid by customers or clients. ...
- ACH transfer. ...
- Mobile payments. ...
- Invoicing and billing.
- Accept Credit Cards and Debit Cards Online. ...
- Accept Online Payments with eChecks and ACH. ...
- Look Into Mobile Payments, Which Continue to Grow. ...
- Provide an Online Payment Gateway. ...
- Add Click-to-Pay Email Invoicing. ...
- Schedule Recurring Billing. ...
- Build an Online Store.
- Mobile apps and digital wallets. Mobile payment apps facilitate payments for goods and services. ...
- Pay-enabled invoices. ...
- Manually keyed-in card information. ...
- Card readers and mobile card readers.
You can easily facilitate accepting card payments through established payment providers such as PayPal or Stripe. These will accept the most-used credit cards worldwide — Visa, MasterCard, and American Express.How do I accept a payment privately? ›
- Virtual credit cards.
- Cash App.
Traditionally, cash, debit cards, credit cards, and checks were the main types of payments. Now, more advanced forms of digital payments are becoming more popular. This includes online payment services, digital currencies, and electronic transfers.How can small businesses take payment online? ›
- DepositFix. DepositFix makes it easy to integrate other business resources, including HubSpot forms, Stripe, and PayPal. ...
- Stripe. A great payment method for small businesses and large corporations alike, Stripe offers payment processing services for businesses. ...
- One Page Pay. ...
- Square. ...
- Checkout HQ. ...
- Collect. ...
- Authorize.net. ...
- Research your options.
- Set up your merchant account.
- If you're not an expert, get one.
- Set up a hosting platform.
- Register your site.
- Build the payment form.
- Find a processing solution with an applicable API.
- Banking Cards.
- Mobile Wallets.
- Banks Pre-paid Cards.
- Point of Sale.
- Internet Banking.
Cards are among the most widely used payment methods and come with various features and benefits such as security of payments, convenience, etc. The main advantage of debit/credit or prepaid banking cards is that they can be used to make other types of digital payments.
Which is the best method of digital payment? ›
This method of waving is way faster and more convenient than inserting a card. Contactless payments are also faster and more secure than the PIN technology as it transfers the encrypted data to the point-of-sale device instantaneously.
- Review your customers history before you call.
- Have two or more options for payment arrangements in mind before the call.
- Repeat everything to the customer.
- Get it in writing and have your customer sign it.
- Follow up and follow up.
- Debit cards.
- Credit cards.
- Mobile payments.
- Electronic bank transfers.
The most reliable way of accepting a payment when selling something online is cash. If the item is of significant value, a cashier's check should also suffice. To avoid confusion down the road, make it clear in your ad and in your conversations with a potential buyer that you will only accept cash.What is the safest form of payment to accept? ›
Debit or credit cards are generally regarded as the safest. If you are paying by card, it is important to verify that the provider of the payment gateway is a company who is regulated, and has the right accreditation such as PCI Level 1.What is the most secure way to receive payment? ›
- ACH debit.
- Debit and credit cards.
- Payment apps.
Paypal. Paypal is one of the biggest and most familiar of all the online payment options. The site has over 254 million users. That's a lot of people who would have an easier time making a purchase on your website if you let them check out with Paypal.How do you ask a client for payment without being rude? ›
- Introduce yourself and explain why you're calling.
- Be clear, concise, polite, and short.
- Don't use slang words and expressions.
- Don't make direct accusations about the client not paying you.
- Maintain an impersonal and polite tone that gives your client the benefit of the doubt.
Transaction fees: For new and small businesses, solutions like Square and PayPal with flat fees and no monthly minimums are usually the most affordable. As your business grows, solutions with interchange-plus or membership pricing, such as Payment Depot and Stax by Fattmerchant, can offer the lowest rates.How do I legally ask for payment? ›
- Check the Client Received the Invoice. ...
- Send a Brief Email Requesting Payment. ...
- Speak to the Client By Phone. ...
- Consider Cutting off Future Work. ...
- Research Collection Agencies. ...
- Review Your Legal Options. ...
- First Email Payment Request Template. ...
- Second Email Payment Request Template.
What are the types of digital payments? ›
- Modes of Digital Payments.
- Unified Payments Interface (UPI):
- Bharat Interface for Money (BHIM):
- UPI 123PAY:
- UPI Lite:
- Cards (including RuPay Debit Cards)
- Immediate Payment Services (IMPS):
- Aadhaar Enabled Payment System (AePS):
An invoice comes before a payment has been, while a receipt comes after the payment has been made.How many payment modes do we accept and what is that? ›
Beyond credit and debit cards, digital payments include paying by PayPal, Venmo, and Zelle as well as through mobile wallets like cell phones and smartwatches. According to McKinsey, 82% of Americans use digital payments. All of these payments enable money to be transferred from one account to another electronically.How do you collect payments? ›
- Ask for payment upfront. ...
- Be clear and forthright about your payment expectations. ...
- Send follow-up emails. ...
- Offer an adapted invoice schedule. ...
- Reach out to others at the company. ...
- Consider dropping the client.
- Send Polite Email Reminders. ...
- Pick up the Phone. ...
- Contact the Billing Department Directly. ...
- Cut off Future Work. ...
- Send a Final Demand Letter. ...
- Hire a Collection Agency. ...
- Go To Arbitration or Take Legal Action.
Anyone can set up an account with a payment service provider like PayPal or Stripe; you don't have to be a legal business entity. Those accounts let you accept credit card payments from anyone, including friends, family, customers and clients.Should my small business accept credit card payments? ›
Sure, cash might be the simplest payment method, but it's not the most popular. In fact, a 2019 Federal Reserve study found that only a small percentage of payments today are made with cash and about 34% are made with credit cards. It's definitely in your best interest to accept credit cards for your small business.What is the best way to pay yourself as a business owner? ›
Most small business owners pay themselves through something called an owner's draw. The IRS views owners of LLCs, sole props, and partnerships as self-employed, and as a result, they aren't paid through regular wages. That's where the owner's draw comes in.What are three benefits of digital payments? ›
- Reduced Transaction Costs.
- Secure ePayment Transactions.
- Saved Time and Resources.
It's a card that slides into a payment terminal, which charges a specific amount of money to it. Many cards have near-field communication (NFC), which facilitates payment without the card touching the POS terminal (also known as “contactless” payment).
What precautions must be taken while making digital payments? ›
- Avoid saving card details. ...
- Use a private window for transactions. ...
- Don't share passwords. ...
- Avoid public computers/Wi-Fi networks. ...
- Beware of fraudulent apps.
A digital payment, sometimes called an electronic payment, is the transfer of value from one payment account to another using a digital device such as a mobile phone, POS (Point of Sales) or computer, a digital channel communications such as mobile wireless data or SWIFT (Society for the Worldwide Interbank Financial ...Which app is most used for payment? ›
- Our Top Picks.
- Cash App.
- Google Pay.
- Meta Messenger.
- See More (3)
However, there are some unique security challenges associated with digital payments. When consumers make payments online, it is difficult for the merchant to verify their identity due to the faceless, relatively anonymous nature of the transaction.How can I improve my digital payments? ›
- Seeding of Bank Accounts with Aadhaar and mobile numbers.
- Enabling Public Financial Management System (PFMS) facility in the Panchayats of the Districts.
- Adopting digital payment facilities at ration shops and fertiliser shops to enable digital payments.
- Credit cards.
- Debit cards.
- Mobile payments.
- Electronic bank transfers.
- Provide Incentives For Use. ...
- Cater To Those With Disabilities. ...
- Expand The Types Of Transactions. ...
- Implement Identity Management And Encryption. ...
- Create A Faster User Experience. ...
- Include Digital Payment Services In Social Platforms. ...
- Integrate The Payment Value Chain. ...
- Support Global Standardization.
To start, locate the wallet app on your smartphone—most are already installed—then enter your credit or debit card information. The application allows you to store multiple cards and to set your default payment method. Your digital wallet can't be used for a payment without your authentication.How do I set up a digital payment system? ›
Create an online payment system: step-by-step
Set up a hosting platform and apply for a Secure Socket Layer (SSL) certificate. Build the payment form/payment page. Find a payment processor that gives you the ability to process different types of payments, from credit and debit cards to Direct Debit.
- Register your business and trademark according to your jurisdiction requirements.
- Partner with a bank and get an account for your activity. ...
- Acquire a domain name and the equipment needed. ...
- Hire a Development team who'll build the payment software.
How can I accept payments on my cell phone? ›
- Sign in to your virtual terminal via Square Dashboard.
- Hit 'Take a Payment' in the menu.
- Call the customer and ask them to provide their card details.
- Complete all payment fields.
- Double check the information with the customer.
- Hit 'Charge'
- The sale is complete.
In general, however, electronic payment systems must exhibit integrity, authorization, confidentiality, availability, and reliability. A payment system with integrity allows no money to be taken from a user without explicit authorization by that user.What are the three methods of e payment? ›
The most popular methods of electronic payments include credit cards, debit cards, virtual cards, and ACH (direct deposit, direct debit, and electronic checks).How do I start a payment solution? ›
- Business and trademark registration.
- Establishing a partnership with banks, and payment processing solutions providers to be competitive in the market.
- Acquiring a domain name and the equipment needed for software building.
- Hiring a development team.
- Google Pay.
- Cash App.
- Apple Pay.
- Samsung Pay.
Without a merchant account, you can accept credit cards the way many modern businesses do: with a payment service provider. Payment service providers (PSPs) like PayPal, Square, Stripe and the like make this process a lot easier and, in many cases, cheaper than it used to be.How can I accept card payments over the phone? ›
For taking card payments over the phone, you'll need a virtual terminal. A virtual terminal is a secure web or software application that allows you, the merchant, to take card payments without a credit or debit card being physically present.