For Many Small-Business Owners, a Necessary Shift to Digital Payments (2024)

FAQs

What are the benefits of shifting to digital payments? ›

Secure ePayment Transactions

Electronic payments are much more efficient and safe than their traditional, paper-based counterparts. ePayment methods and systems offer multiple ways of securing your payments, such as payment tokenization, encryption, SSL, and more.

Deter theft

Not only is it difficult to track its movement, once cash is gone, there is no way to recoup it. Running a cash business can also make you a target for robberies. For owners, managers, staff and customers, this is no small thing. Going cashless deters thieves and makes your store a more secure place.

Enhanced efficiency and reduced costs

Cashless payments improve overall efficiency and reduce operational costs in a business. These types of payments are faster to process as customer service teams don't need to handle, count, or bank physical cash, and all accounting can be stored and completed digitally.

Speed of transactions

For both the seller and the customer, online payments save a lot of time. People don't have to wait in lines, take time to write checks, or wait for paper bills. They don't have to wait for banks to clear their checks so that they can access the money.

Surge in Electronic Transactions: The Driving Forces

Projections suggest that electronic payments could nearly triple by 2030, exceeding 3 trillion transactions globally. The forecast is that between 2020 and 2025, electronic transactions are expected to grow by 82%, from one trillion to 1.8 trillion operations.

When you pay digitally, you always leave a digital footprint, and this footprint is easily monitored by financial institutions. Understandably, consumers are uneasy about their data being harvested or tracked by big businesses. Many people also feel that cashless spending is more difficult to control.

It might be said that the US is headed toward a cashless society. Some small businesses have even put up signs saying that they no longer accept cash, another factor that's driving this change. Cash payments can take longer, limit potential sales, and open up businesses to the possibility of an audit.

In addition to simply eliminating the costs and hassles of managing currency, going cashless may also reduce certain types of crime. The downsides of going cashless include less privacy, greater exposure to hacking, technological dependency, magnifying economic inequality, and more.

On the basis of this study, various reasons came out due to which the rate of adoption of digital payment is low. These reasons are – low digital literacy in India, especially in rural India. Lack of proper infrastructure like the supply of electricity in remotest area, poor connectivity, low quality of internet.

Should digital payments replace cash? ›

One of the biggest drawbacks is the risk of theft or loss. Cash can be easily stolen or misplaced, while checks can be lost in the mail or stolen from a mailbox. In contrast, digital payments are more secure and can be easily tracked and monitored, reducing the risk of fraud or theft.

These payments can be made completely online, so they are the top pick for many consumers today who handle much of their shopping online. Additionally, electronic payment is much quicker and easier to track than traditional snail mail, which makes it an easy choice for many consumers and businesses alike.

Online payment methods have several advantages and disadvantages that one should be aware of. The advantages of online payments include fast speed, a simple onboarding process, ease of use, automated payments, discount offers, and lower transaction costs.

EFT payments are a convenient and efficient way of sending and receiving money electronically, without the need for physical checks, cash, or wire transfers. EFT payments can offer you faster and cheaper transactions, enhanced security and convenience, and simplified accounting and record-keeping.