Your customers can make electronic payments to pay for goods or services using their cards, mobile phones, or the internet. There are many benefits to electronic payment, including time and cost savings, higher sales, and lower transaction costs. It is susceptible to internet fraud, which could increase your business expenses.
Advantage: Increased speed and convenience
E-payment can be more convenient than traditional payment methods like cash or checks. Your customers won’t need to wait in line to pay online for goods and services. They can do so anywhere they are located. Customers don’t have to wait for their bank checks to clear so that they can shop with the money they need. E-payment eliminates security risks associated with cash money handling.
Increased sales are an advantage
The number of people who make cash payments is declining as internet banking and online shopping become more popular. Bankrate reports that more than two-thirds of Americans carry less than $50 per day. This means that electronic payments are becoming more popular. E-payment allows businesses to sell to customers who pay electronically and gives them a competitive edge over companies that accept traditional payment methods.
Advantage: Lower transaction costs
Cash payments are free, but trips to the store can cost money, and mail is required. There are often no additional fees, or very small fees, to pay online or swipe your card. E-payment can save individuals and businesses hundreds of thousands of dollars in transaction fees over the long term.
Although e-payment is protected and secured by strict measures like symmetric encryption, hackers can still access it. For example, fraudsters use phishing to trick users into giving their login details for their e-wallets. They then capture the information and use it to gain access to the victims’ financial and personal information. E-payment systems are also plagued by inadequate authentication. Anyone can use the cards or e-wallets of another person without having to prove their identity using biometrics or facial recognition. Some people may be reluctant to use electronic payment systems because of these security concerns.
Disadvantages of disputed transactions
You can file a claim against your bank, online payment processor, or credit card company if someone uses your company’s electronic money without you being present. It can be difficult to file a claim without sufficient information about who made the transaction.
Disadvantage: Higher business costs
E-payment systems require increased security to guard sensitive financial information in business computers from unauthorized access. Enterprises that have in-house e payment systems will need to incur additional costs for procuring, installing, and maintaining advanced payment-security technology.