Five Arguments for SMBs Needing Digital Payments in 2023

Introduction payments in 2023 and beyond It's a fact that in 2023, a small and medium-sized business (SMB) that does not provide its clients with the ease and choice of digital payments would find itself in a difficult situation.

Customers in several nations prefer to conduct business with companies that accept contactless payment methods. Nearly 65% of small business consumers want to stick with contactless payments long when the pandemic is over, according to a new Visa Back to Business report.

Agile small firms have embraced innovative methods of conducting business, including internet commerce in the front office and automated account payables and account receivables solutions in the back office. As numerous businesses have realized—and many more still do—digital payments and the digitization of payment processes are not only advantageous for businesses, but also increasingly necessary for them to remain in operation, particularly in light of the implementation of legislation that cater to customers, like PSD2.

B2B digital payments are important for SMBs.

SMBs now need to use B2B digital payments in order to thrive in the current business environment. SMBs must use digital payments due to their many advantages if they want to enhance cash flow management and obtain a competitive edge.

The ability for businesses to receive payments instantaneously is one of the main benefits of digital payments: speed. Furthermore, by protecting sensitive data and enabling encrypted transactions, digital payments offer higher security.

Small and medium-sized businesses (SMBs) can improve customer satisfaction and retain consumers who prefer the ease of using credit cards or mobile devices by providing digital payment choices. SMBs may streamline their processes, draw clients, and set themselves up for long-term success by accepting digital payments.

Advantages for SMBs to Implement B2B Digital Payments

In the fast-paced world of today, business-to-business (B2B) digital payments have the potential to completely transform how SMBs run. Checks and wire transfers are two examples of traditional payment methods that might be ineffective and time-consuming. B2B digital payments, however, can assist SMBs in a number of ways.

Quicker Transactions: SMBs can receive payments from clients and customers more quickly thanks to B2B digital payments, which process instantaneously. This can facilitate wiser financial decisions and enhance cash flow management.

Decreased Costs: Compared to traditional payment methods, B2B digital payments often have reduced transaction fees, which helps SMBs save money over time.

Enhanced Security: By protecting sensitive data and utilizing encrypted transactions, B2B digital payments lower the possibility of fraud and theft.

Better Cash Flow: SMBs may more precisely track their revenue and expenses thanks to B2B digital payments, which provide real-time access to transaction data.

Improved Customer Experience: Small and medium-sized businesses (SMBs) that use digital payment solutions can draw in and keep clients who find it more convenient to use a credit card or mobile device.

SMBs may improve processes, draw in and keep clients, and set themselves up for long-term success by embracing B2B digital payments. Using digital payments is essential in the cutthroat industry of today.

Let's now discuss five ways that digitalization and digital payments might benefit your small or mid-sized firm.

Five Ways Online Payments Can Help Your Small Business

1. Shorter Time Spent Processing Payments

Processing digital payments is quicker. According to a Deloitte PayTech Revolution research, processing digital payments is more than 50% quicker than processing traditional purchase orders. More control over receivables is closely correlated with speedier payment processing for business owners.

2. Smooth Approval Procedure

When an invoice is received, the customer's organization examines the information, compares it to records, looks for any discrepancies, and goes through several review cycles before authorizing payment.

Suppliers that offer self-service portals that enable consumers to monitor bills and make payments from within the site following approvals can greatly simplify this time-consuming procedure for their clients. Because all parties involved can see the bills and comments in one location, managing the approval process is made simple.

Furthermore, having a variety of payment choices raises the convenience factor.

3. Lower Expense of Administration

The adoption of digital payment methods and processes can lead to a minimum of three times higher cost efficiency compared to traditional purchase-order processes, as they eliminate the need for reconciliation work and minimize manual involvement and errors.

The cost savings from not having to print and mail paper checks and invoices can be included, potentially increasing overall cost efficiency by up to 500%. Naturally, all of this expense cutting is reflected in higher EBITDA.

4. Better Cash Flow

Businesses may make more informed decisions about the transfer of funds when they have more visibility into their cash holdings. Additionally, quicker settlement of digital payments enhances cash flow. Business leaders may make well-informed decisions about spending and investing thanks to modern accounts receivable solutions that allow suppliers to slice and dice data and extract useful insights.

5. Strengther Bonds with Clients

Digital payments are quickly replacing check payments and paper-intensive business operations, having almost completely replaced cash in the consumer market. Businesses can facilitate timely payments from their customers by offering various payment options, including ACH, credit cards, debit cards, and digital wallets.

According to over 72% of small and microbusiness owners contacted for the Visa study, they anticipate that their clients would continue to favor digital payments in the future.

More millennials and baby boomers than Gen Z, who were the early adopters of digital commerce, have spearheaded the change to digital payments because to the abundance of safe payment choices available on the market, such as Apple Pay, Square, Dwolla, and more.

One could easily argue that a company is getting ready to walk the plank sooner rather than later if it does not offer the option of digital payments. The clear call to action now is to embrace digital business-to-business payments and optimize the back office.