5 ways payment technology can contribute to business growth
From the early days of lockdown at the beginning of the Covid-19 pandemic, we’ve seen the unstoppable wave of digitization. Among the many technologies that have seen exceptional innovation in the last two years, has been payments.
Today, having the support of powerful payments technology is no longer a nice to have but essential. From improving operational efficiency to managing cash flow to facilitating better security, business continuity, and customer experiences, -it has become a vital part of the business ecosystem.
In this blog, we dive into the five improvements and competitive benefits businesses can expect when they leverage payments technology. We also provide a real-life example demonstrating how it can help businesses expand globally.
1. Boosted Operational Efficiency
When businesses rely on outdated, manual payment systems, it can be easy to run up operational costs. Along with the expense of having adequate staff members who know how to manage a manual payment system, outdated systems can also result in more errors and delays.
By comparison, businesses that utilise payments technology providers achieve much greater operational efficiency and improved accuracy and timeliness.
For instance, let’s say you run a financial services business. You could optimize your payment system by adopting open data sharing technology. This technology can significantly reduce the costs associated with customer relations which, according to McKinsey Global Institute, typically make up 20% of a financial business’s income.
Having the technology in place to make payments more efficient is the first critical step of optimizing your payment system. This technology can cover all your payment needs, from automating payment processes to reconciliation.
2. Enhanced Cashflow Management
Cash flow is an essential consideration for any business owner, as it provides the foundation for conducting business.
As we discussed above, payment technology can provide your business with the ability to significantly boost efficiency. This improvement to operational speed also means that your accounts payable (AP) and accounts receivable (AR) are easier to keep in balance.
Speedier payments also allow business owners to gain greater visibility of the financial health of their businesses.
3. Improved Security
In the digital age, customers and businesses alike are growing more concerned about the digital security of their payments. A 2020 survey of more than 980 digital payment users in the U.S. stated that 69% of participants worry about the safety of digital payment platforms.
When it comes to what participants were most concerned about, the top responses included hacking (41%), fraud (16%), and theft (12%).
However, these concerns have not proved to be a turn-off, as customers not just in the U.S. but around the globe show no sign of slowing down their use of digital payment technology. According to The World Bank, two-thirds of adults worldwide use digital payment technology to make or receive payments.
With this increasing reliance on digital payments, it is more important than ever for businesses to be able to provide secure payment services to their customers and business partners alike. Payment technology can help support a business’s financial ecosystem by ensuring all transactions are safe and easy to track.
4. Greater Business Continuity
When the whole world went into lockdown after the rise of the Covid-19 pandemic, businesses of all kinds and industries were challenged like never before.
Many of the businesses that weathered the pandemic storm often attribute their success in challenging times to the use of payment technology.
In 2021, World Bank Group published a policy research working paper that observed a “significant increase in the sales of merchants with contactless payment technology relative to those without this technology” during the response to Covid-19. This paper also notes that the average merchant offering contactless payments experienced an 8.3% increase in sales.
Let’s face it — the world is changing. It’s essential to have the proper technical support to maintain a solid and secure payments system, no matter what may happen around the globe.
5. Personalised Customer Experiences
Customers want the freedom to use their preferred payment methods, whether traditional card payments or alternative payment methods such as virtual wallets or mobile payments. Additionally, customers want their payment experiences to be as streamlined as possible.
Creating frictionless and personalised payment experiences is no small task and is often impossible without the support of payment technology. With technology that allows currency exchanges, like Freemarket, businesses can serve customers in international regions more efficiently.
What Does This Look Like In-Person?
Okay, so conceptually, you’re with us. But what does this really look like in person? Well, let’s explore one real-life use case to get a better understanding of how the right payments technology in place can really give businesses a competitive edge.
Alternative Airlines, one of the fastest growing online travel businesses, were looking to expand their growth into the Middle East, Asia, Africa, and South America. But they had a problem; how could they, a UK-based company, provide a localized payment experience across a range of geographical locations?
The traditional answer would be to set up siloed banking relationships one, by one, by one, in each of the countries they were planning to operate in. As anyone who has done that before knows, it’s a time-consuming, costly, and manual process.
Rather than look for a bank in each country, they decided to look for partners; ones who could offer them a unified experience, a range of global accounts, business continuity, partnerships with multiple banks, and cross-border currency capabilities. And they found one in us: Freemarket.
Freemarket is a multi-currency cash management and FX solution. We aggregate a range of banking providers, across a wide pool of geographic locations, into a single source. By leveraging us, Alternative Airlines were able to access accounts in a range of currencies for each of their markets, including; Saudi riyal, Emirati dinar, Bahrani dinar, and Kuwaiti dinar. By accessing these currencies, they’re now able to grow in each of their chosen regions and offer users a local payment experience.
Want to hear more? Check out the press release here.
Key Takeaways
Times are changing, and the days of legacy payment systems are ending.
For a business to have a sharp competitive edge in today’s financial landscape, it is essential to deploy agile payments technology solutions to ensure financial health.
Businesses have two main options when deciding how to implement payment technology:
- Hire and onboard a dedicated team and invest in the technology themselves
- Work with a payment services provider who can assist in providing both technology and expertise
Here at Freemarket, we provide a range of innovative, essential payment services, including reconciliation, currency exchange, and cross-border payment services.
Get in touch with our team today to learn how you, like Alternative Airlines, can grow with Freemarket as your partner.
