COVID is driving a renaissance of digital payments

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Stoyan Kenderov, Director of Product and Technology for Plastiq, explains how 2020 saw many manual, legacy and accountable payment practices fall apart, with businesses of all sizes suddenly embracing the promise of automation digital payments. For more on the leaders’ perspectives, see “The Way Payments Are Now Made”.

In 2020, small businesses were scrambling to figure out how to adapt to doing business remotely. From construction companies, manufacturers and wholesalers to software platforms supporting these SMBs, businesses have had to retool quickly to survive.

Office closures and remote work protocols have revealed how much small businesses previously relied on physically receiving and processing supplier invoices and customer payments. Almost overnight, everyone realized that they needed complete digital methods to maintain their cash flow. For many businesses, prompt payment to vendors is intrinsically linked to their revenue stream, so paying promptly and communicating payment delivery with vendors is paramount.

Despite a limited number of B2B payment solutions on the market, over the past year more and more businesses have changed the way they pay and get paid to online payments and accepting payments. The questions of cost versus benefits had to be answered. The majority of small businesses believed their business models would never support online payments, even if their customers had to resort to credit cards to make up for short-term cash shortages.

But in recent years, the online payments market has innovated and offered an incredible new dimension. A business can now pay with a credit card online, even if its provider does not accept cards – and vice versa, can also be paid by credit card at no additional cost.

With less effort, less expense, faster receipt of payments, and greater flexibility in cash flow on both sides, 2020 has become a year where many legacy, manual payment and accounting practices have been abandoned. and businesses of all sizes have finally started to embrace the promise of digital. automation of payments.

Plastiq has led this movement by allowing SMEs to pay their suppliers and get paid by customers on a simple, easy, fast, secure and reliable platform to use. It separates the source of funding from the disbursement method, so if a construction company wants to pay for materials on their credit card but the seller still wants to receive a paper check or wire transfer, Plastiq does it. To make it even easier, vendors don’t even need to register with Plastiq to get paid, although it does unlock many benefits at no additional cost.

When it comes to accepting payments, Plastiq gives every business a unique URL that can be used on digital invoices, texted or emailed, or hosted on their website. One click takes the customer to a payment page. Or they can use a single line of code and integrate a seamless checkout experience into their own online order flow. For anyone used to the status quo of waiting for payments or spending time researching those payments, Plastiq’s digital acceptance has opened up a whole new world of ways to operate that are much more efficient.

Solutions that solve these challenges for SMEs existed before the pandemic, but they tended to be far too expensive or complicated for a typical small business. Millions of low-tech SMBs finally had a transformative solution for their new challenges of cash flow and payment automation, with all the flexibility they needed, but with workflows and capabilities to simplified integration.

Today, many small businesses pay all of their expenses by credit card, which helps them conserve cash, extend payment terms, and improve cash flow. They can make large payments with no bank limits that complicate their ability to pay. And they can even quickly pay overseas vendors by card, lock in inventory, build trust with their critical vendors, and often earn early payment discounts.

We have gone further to accelerate this trend by enabling partners to offer these advanced payment capabilities to their customers directly on their own platforms. Plastiq Connect includes our set of APIs and tools that allow seamless integration of our new B2B payment options. In just a few weeks, a partner can be up and running with everything Plastiq has to offer, all on their own sites.

The pandemic has challenged SMEs in ways we have never experienced before. The capacity to adapt has become a pressing need. But by embracing this change and applying it to their old ways of paying and getting paid, businesses that have adapted are successfully weathering the storm and thriving again.

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NEW PYMNTS DATA: DIGITAL BANKING STUDY – THE BATTLE OF BREWING FOR WHERE WE WILL BANK

On: Forty-seven percent of U.S. consumers avoid digital-only banks due to data security concerns, despite considerable interest in these services. In Digital Banking: The Brewing Battle For Where We Will Bank, PYMNTS surveyed over 2,200 consumers to reveal how digital-only banks can boost privacy and security while providing convenient services to meet this unmet demand.


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