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Electronic Payment Systems: The Technology Has Come of Age
Appeared September 2013 - volume 10 - issue 9 - page 20
Article has been viewed 1229 times.
The old saying “Cash is King” is quickly becoming just that … old. With the new technology in today’s world we have swiftly moved toward “Plastic is Preferred.” In 1993 cash made up 60% of all purchases, in 2003 just ten years later that figure decreased by 30% while credit and debit card usage increased dramatically.
However, to see where we are going, let’s first look at where we have been. One of the earliest forms of payment recognized was bartering in the 1400’s and while we still use it to some capacity today it was replaced with a more efficient way to accept payments, dollars and coins. We have used this form of currency since 1792, and it too has been replaced in large part by yet an even more efficient way to carry and spend money, the credit/debit card. Credit/debit cards offer the benefits of only needing a slim plastic card to make payments, instead of multiple loose bills and coins; more security in case of a loss, when you lose cash more than likely you will never see it again however if you lose a credit or debit card you can make one phone call and ensure no one can use it. It also opened up the door to borrow money with the swipe of a card, there is still some debate as to whether this is a pro or a con, none-the-less it changed how we spend money.
As you can see we have a pattern, each time we are replacing our current form of money with a more efficient and secure form. As new ways to pay people are developing businesses should also be developing new ways to accept these payments. Customers are more apt to pay you in a timely manner if it can be done in the most convenient way for them. For example, would you be more likely to pay a bill on time if you had to get up, get dressed, drive down to a dealership, and stand in line to then make a payment? Or would sitting on your couch, in your pjs, watching Maury and clicking a few buttons on your phone or computer sound more appealing to you? Technology is developing all around us and it is important to start taking advantage of all the opportunities you can to get money to your business faster, you don’t want to get left in the dust.
First things first, if you are not accepting credit and debit cards you are already behind the curve. A recent survey conducted by WebPay shows that 58% of small businesses are regularly asked by customers to accept credit cards. Consumers are expecting to pay with a form of plastic in today’s market and 69% of them between the ages of 18-34 will only shop at businesses that accept multiple forms of payment. The benefits of accepting card transactions are endless: time efficiency, fewer bank trips and shorter check out time, eliminates mistakes in counting money and change, automated reporting and calculations, accepting card payments also opens the door to use the advanced payment features we will highlight in this article.
While most people would prefer to use a credit or debit card there are a good number that would like to pay directly from their checking or savings account. I know what you’re thinking, just write a check. Again we come to the ease of payment and the security, why not offer ACH? Automated Clearing House was set up in 1972 and has grown exponentially over the years. Allowing someone to pay with their checking or savings account number opens the doors to take payments in more ways than just a check. We come back to the same “what would you rather” scenario described earlier: Would you be more apt to make a payment on time if you had to purchase checks, write the check, pay for postage, mail the check, hope that it gets there on time or at all? Or would you rather sit on your couch, in your pjs, and click a few buttons on your phone or computer and make a payment just using your routing and account number? The easier it is for your customer to make the payment the better chances you have for them to do so.
Now that we have set up your merchant account (credit card) and set you up to accept ACH transactions let’s talk about all the new advancements that are available to you, starting with the Internet. Since the purpose of this article is to educate you on technology in payment processing, I won’t go into all the information and statistics about how the internet has not only completely changed our way of life but also the way we do business. So if this powerful tool is helping us in every aspect of our life why not let it help you get your money faster? Offering payment options on your website will not only give your customer an easier way to make payments, but they can then make the payment twenty four hours a day, seven days a week. The best part is there are no extra man hours to absorb. This feature will also funnel more traffic to your website and in turn increase the views of your inventory and offers you have available.
What if I don’t have a website? No problem! Many payment processors can provide you with a secure hosted web payment page. Paymaxx Pro offers its product, Paymaxx Pay, which provides you with a web page that uses your company name in the URL, shows your company logo and contact information, and allows customers to make a credit/debit card or ACH payments securely. This feature will also send you an e-mail every time a transaction has been made and will tie into your other payment reporting. Since Paymaxx is hosting the page for you there are no security worries on your part.
If you have a website that offers payments, consumers will not only be able to pay from a home computer, tablet or laptop but also … yes you guessed it … a mobile phone! Who doesn’t own a mobile smart phone today? Did you know one manufacturer of IPhones produces more phones in a day then the number of babies born? That’s a lot of phones, so if all these people have phones why not take advantage of having them use them to make payments? That brings me to another feature that not only reminds customers to make payments but allows them do it right from their phone. It is no secret that people are constantly on their smart phone, texting, e-mailing, playing Candy Crush. With so much attention being paid to these little devices a business would be silly not to use that to their advantage. There are so many options, websites, mobile apps, text reminders, oh and let’s not forget that IT IS a phone, so there are calling options as well. One of the options used more recently is something called Text to Pay. The idea behind this is that a dealership can set up reminders via text (or e-mail) and push to a customer to remind them that their payment is due, or past due. That sounds good right? Well taking it one step further, the reminder can include a message that states something like “If you would like to make this payment with credit card *****1234 on file please text “Y” and that’s it they are done, with a simple text of “Y” a payment has been made. I’m not sure what could be simpler than that?
Now, some people might be leery of just texting (e-mailing) Y and trusting that their payment has been made, well the text (e-mail) can also provide a phone number to call to make an IVR payment. IVR? Don’t worry we’re getting to that next. The goal is simple, the easier it is for a customer to make a payment the more likely they will do it in a timely manner. Let’s go back to that acronym I used earlier, IVR which stands for Interactive Voice Response. This has been mainly used in the past as a customer service tool to have callers choose numbers on the phone key pad to direct them to the department they need at a business. Using this tool for customer service has proven exponentially useful and has increased customer satisfaction and the amount of return customers as well. Payment processors have taken that feature and expanded it to now accept payments in a way that is secure and compliant. Just provide your customer with a phone number and they can call into an automated system to make a payment, generally in about 3 minutes. Also, a trend we are seeing with all of these new payment features, it does not require extra resources to utilize. Customers can call in any time of day and make a payment which frees up your staff and allows them to increase their overall productivity. Paymaxx Pro has developed its IVR system from the ground up so it is fully customized to tie into its payment processing platform, as well as some dealer management systems. This automated system has customizable features including personalized scripting and voice prompts, real-time credit card processing, is NACHA, PCI and HIPPA compliant and can tie in the Text To Pay feature as well.
A new technology that I would like to “touch on” is businesses that are now using the IPAD or similar tablets as a POS (Point of Sale). With all of the apps available today using an IPAD for business purposes and also doubling as a point of sale tool you can start to see the full potential of a small investment. Why spend hundreds of dollars on a new terminal that is stuck to your counter when you could use your IPAD to simply plug in a dongle and take payments. (Dongle is the technical term for a card swipe reader that plugs into a mobile device). Or better yet why spend thousands of dollars on a kiosk for your dealership when you could use a simple and much less expensive IPAD mount? Paymaxx Pro offers a dongle that could plug into your IPAD and runs an app that will allow customers to swipe their own card or key enter their information to make a payment through the mounted IPAD.
Technology is moving at the speed of light and if businesses don’t jump on the band wagon soon they are going to be left behind. The cost and time efficiency that these products promote and doing so with little out of pocket, make them a no-brainer to implement into your business. Simply setting up a web payment page could increase collection of your payments receivable in the 0-30 days window by 25%. Why not take advantage of what the payment industry has to offer? For more information on any of the products listed please feel free to contact Paymaxx Pro 877.527.5658 or email email@example.com