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Over the past five years, the use of digital payments have been increasing steadily. However, the switch was accelerated dramatically by the COVID-19 pandemic as millions of us scrambled to figure out how best to make payments in a world where cash was no longer safe. Besides being physically safer, there are dozens of other benefits and reasons why digital payments and virtual card solutions are becoming the new normal.
What Are Digital Payment Methods?
Contactless, cashless, and paperless payments are all technically classified under the umbrella term of digital payments. They refer to any payment that can be made digitally. Their use throughout the developed and developing world has skyrocketed over the last decade. In 2012 about 300 billion digital transactions took place. However, in 2022 there is expected to be over 1 trillion transactions made. It’s expected to only increase from there.
With the great tech moguls of Apple and Google both boasting their own digital wallet systems and more businesses than ever before accepting digital payments, we might be heading for a world where the wallet itself becomes obsolete.
However, is that a good thing? Digital payments are faster and more convenient for both businesses and customers. However, how else could digital payments benefit your business?
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1. Control and Security
Digital payments have an added layer of control and security that you won’t find in conventional cash payments. This is due to only being used for selected, pre-approved payments. This means you can closely monitor company spending. The risk of rogue payments is also mitigated almost entirely.
Card payments link to the transaction itself rather than the actual card. They are also sent through encryption services, meaning it is far more difficult for hackers to trace payment details.
Currently, 60% of consumers use digital or cashless payments. This is a figure that will continue to soar as the ramifications of COVID-19 and safer payments become a reality. So, by not utilizing digital payment methods, you’re potentially missing out on a significant share of the market. It’s easy to see why as it not only means being able to make payments without having to send or receive invoices, but it’s fast, traceable, and secure.
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3. Cash-Flow and Transparency
Electronic payments allow you to hold on to your money for longer and pay later since you can wait until the day a payment is due to send money. Thus, shortening the time between sending an invoice and receiving payment. Also, you no longer need to spend time creating detailed records as digital payments are easily traceable natively through their own online system. This leads to greater transparency and less focus payment tracking.
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