Today, consumers are switching from traditional payment methods, such as cash, cheque and cards to digital payment. The global pandemic has fuelled this unprecedented shift in consumer’s behaviour.
With this shift in the payment options and the rise of online sales, business owners are forced to respond to this change by increasing their digital payment capabilities. But you might be wondering what are the current digital payment trends? More importantly, how safe is it to conduct transactions digitally? In this article, we will share an overview of the digital payment trends and address some of the security concerns around this payment option.
By the way, if you’re an e-commerce business, don’t you think it’s time to switch to an accountant who really understands how accounting for e-commerce works? If you’re thinking of digitising your processes, Osome’s accounting services help you shift away from paperwork bookkeeping.
The Rise of Digital Payment for Business
Over the last two years, digital payments such as contactless payment, Apple Pay, Alipay and Google Pay is no longer considered as alternative payment options. Consumers are increasingly using digital payment when they are shopping online or at physical stores. Additionally, the pandemic has pushed many businesses to quickly transit to the digital economy. There are plenty of digital payment services that have entered the market to facilitate these transactions. Given the consumers do not have to carry cash or wallet, these incentives give them the reason to use digital payment for their business transactions.
3 Digital Payment Trends
The evolving e-commerce landscape has caused many businesses to keep up with digital payment services that are convenient and easily accessible to consumers. As business owners who are planning to start an e-commerce business or have an existing e-commerce business, it’s important to keep up with the digital payment trends. So here are 3 current digital payment trends:
Over the last five years, there has been a surge in contactless payment for online and physical business transactions. The advantage of using contactless payment is that people do not have to contact people and surfaces.
Similarly, mobile payment is another up-and-coming payment trend that consumers enjoy using. As consumers’ shopping behaviour has shifted, companies are looking at ways to make digital payment accessible and effective for their customers and businesses. Popular payment platforms such as Apple Pay, Google Pay and Grab Pay help to make payment seamless and effective. On the other hand, consumers prefer this payment method as they get to earn benefits and rebates each time they use them for their business transactions.
These days, more consumers are engaging in social media channels, such as Facebook and Instagram. Due to heavy traffic, e-commerce businesses are using these channels to reach out to their potential customers. Facebook Marketplace and Instagram are good starting points to sell their products. Through these channels, potential customers get to purchase the products and make digital payments like Paypal.
This is a new payment trend that has taken off in recent years. Previously, customers had to place their order with a salesperson over the phone. However, this mode of communication has shifted to online. It’s called conversational e-commerce. Businesses will communicate with their customers on messaging or chats app, such as Facebook Messenger, Instagram Chat and Whatsapp. This form of interpersonal communication helps build customer relations. On the other hand, it also personalised the customer’s shopping experience.
Yasmin has an online business, selling Polymer Clay earrings. She sells them on Instagram. Each time when a customer purchases a product from her, Yasmin will liaise with the customer through direct message. When the order is confirmed, the customer will pay her through Paypal or Apple Pay. At times, the customer will text her and ask about the next batch of products that will be sold. Yasmin will take this opportunity to share her new products.
List of Digital Payment Services
With the expansion of online businesses, some e-commerce businesses might be wondering what types of digital payment services are useful and effective for their business. Here is a list of digital payment services:
- Apple Pay – A common and popular payment service that replaces your physical cards and cash. It is widely accepted by retailers around the world. This service is built in if you have an iPhone mobile phone. You may set up Apple Pay e-commerce integration for your e-commerce store.
- Alipay – A one-stop payment solution, this payment service is popular among e-commerce stores for its seamless and efficient transaction.
- Google Pay – This enables customers to pay contactless with their mobile. It gives them a faster and more convenient shopping experience.
- Grab Pay – One of the leading digital wallets in Southeast Asia, it offers businesses a seamless payment solution. On the other hand, it provides customers a rewarding and convenient online payment experience.
- Click to Pay - An association with Visa, it enables customers to speed through the checkout process without the need to key in card details and passwords in subsequent transactions.
The Effectiveness of Using Digital Payment for Your Business
Whether you are using digital payment for your brick-and-mortar business or e-commerce business, this up-and-coming payment option is likely to stay, and even thrive.
Digital payment helps to increase your business’s profitability by reducing operating costs. You do not have to worry about accounting matters or delivery records on paper. As a business owner, making and receiving digital payments increase your participation and improve your interactions with clients, vendors and other financial institutions. With digital payment, you can track your sales record and manage your inventory stock easily.
Previously, making payments to your business’s suppliers can be tedious and often, suppliers will have to wait for the end of the month to receive payment in their accounts. But with digital payment, you can make payments more frequently and extend trade credit.
When it comes to transacting with your customers, they get to redeem rewards when they make digital payments at the point of sales. As a business, you are providing value-added service, which will lead you to retain your customers.
Secure Online Payment During Business
Even though digital payment is a good alternative and popular payment option, businesses will still face certain risks, such as security. It is common to wonder if it is safe to perform transactions without falling prey to fraud and data breaches. There have been cases where card numbers or account numbers are being stolen during business transactions. To avoid falling prey to fraud and data breaches, here are some ways you can protect your business:
SL stands for Secure Sockets Layer. It is an internet security layer that helps secure your website, and the URL usually starts with HTTPS. It is important to ensure that your website has an SSL certificate if it is sing domain or wildcard SSL certificate or any other SSL certificate. Customers might be aware of SSL and the padlock icon that comes with it. With these measurements being put in place, it gives customers the assurance to transact peacefully.
PCI Data Security Standards
When a customer purchases goods and services from your e-commerce store, you may request their card details for verification purposes. But as a business owner, it is also important to have a robust payment gateway system so that there will be no data breach. If storing of card details is necessary, you may want to follow the guidelines in PCI Data Security Standards.
One of the main concerns about digital payment is the potential security threat that happens during checkout. That is why 3D secure is a good feature to address this concern. So how does it work? If a customer goes to pay for a product or service from your online store, 3D Secure will add an extra layer of authentication that is done by the cardholder’s bank.
Dawn purchases three books from an online bookstore. When she checks out and proceeds to make payment using her VISA card, VISA will ask her to key in pin codes or biometric scans to verify her purchase.
This extra layer of digital payment security helps ensure that the person using the card is the same person whom the card was issued.
Single QR Code (SGQR)
Also known as Singapore Quick Response Code, it is the world’s first unified payment QR code where it combines multiple payment QR codes into a single SGQR label. The advantage of using SGQR is that it captures transaction amounts accurately, reduces reconciliation errors and theft.
Digital payment is set to thrive in many years to come with many new features in place. Businesses will innovate more payment options to facilitate business transactions between their customers and suppliers. As the government promotes cashless society, e-commerce businesses have to step up to embrace this new trend. Yet at the same time, it is also important to protect and safeguard your customers’ data.
Transitioning into a digital business requires a look in-depth look into each part of your operations. If you would like to know more about to digitise your back end operations like accounting, check out Osome’s accounting services for Hong Kong companies.