Cash Flow Solutions

How Online Bill Pay Can Strengthen Payment Security For Your Business

Business owner at bike shop managing his business accounts online

While some small businesses still rely solely on traditional offline methods to capture payments from customers, many are realizing that setting up online bill pay capabilities can be a valuable business move. Many of today’s consumers are interested in having the option to pay online, and it’s important to show customers that your business is flexible and modern. Online bill pay can also help cut down on late payments, stabilize cash flow and, importantly, help bolster payment security.

The prospect of transitioning from offline methods to online payment systems can be intimidating when you’re used to physical ledgers and paper trails. Business owners and consumers alike may still question whether transactions processed over the internet can truly be as secure as those offline. A survey from NCC Group found that 77% of consumers did not feel safe shopping online, showing that payment security concerns still prevail.

However, with new advances in cybersecurity and payment technology, the safety of online transactions and online bill pay is greater than ever before. Not only that, but moving to online systems can actually increase your payment security and enable safer bill pay. In fact, businesses that are more digitally advanced are proven to grow faster and bring in more revenue than companies that are hesitant about new technology adoption. We’ve answered a few of the most common questions to help businesses make this transition smoothly. 

What is Online Bill Pay?

Online bill payment allows businesses to manage and accept payments electronically, instead of receiving payments in-person or via physical mail. There are a variety of online payment methods that businesses can use, including online payment portals or mobile applications. Through these, customers simply need to go online, log into their account, and pay the business directly. 

In addition to strengthening payment security, there are a number of benefits in setting up online bill pay. First, it’s fast: depending on the payment gateway and processor you use, payment can often be received immediately, or at most within 1-3 business days — generally much quicker than processing telephone payments or mailed checks. It also gives customers greater flexibility: they can pay anytime and from anywhere, instead of needing to pay in person or during working hours. Making it as quick and easy as possible for customers to pay increases the likelihood that they will pay, ultimately helping your business grow.

What are the different offline and online payment methods?

Offline payment methods include any payment that is completed without using an online network. This includes payments made in-person (such credit card payments through a physical point of sale terminal), manually (such as exchanging cash or checks, either in person or via physical mail) or verbally (such as paying over the telephone). 

There are a variety of online payment methods available for small businesses. Many online payments are done through electronic payment platforms that can accept payments from credit cards, electronic wallets, or smart cards, which are bluetooth-enabled credit cards that allow users to access all their accounts from a single card. Some electronic payment platforms let businesses allow customers to store their credit cards in their system, making it easier for them to pay quickly and easily during subsequent transactions. Other online payment methods include digital payment apps, online banking transfers via automated clearinghouse (ACH) or wiring, and banking bill pay services. 

What are the risks of managing bills and accepting payments offline?

While seemingly more straightforward, there are a number of offline payment security risks associated with managing bills and payments offline.

Issues with physical payments: Managing physical payments present a number of risks, including loss or damage to cash, paper checks, or paperwork. For stores that keep cash on hand, there is also an increased risk of theft from both outside robbers and internal employees. Offline bill management also increases the risk of manual errors, such as when counting cash or balancing checkbooks, which can lead to unreliable record keeping.

Credit card security issues: Many companies have come under fire for credit card breaches in the past year, which can be extremely expensive to remedy and damaging to your business’ reputation. The terminals that small businesses use to process in-store credit card payments are generally not highly protected, often relying on aging devices and outdated technology. These devices are susceptible to security issues such as skimming, which helps thieves steal credit card data from customers. It’s also the merchant’s responsibility to keep these up to date, which costs time and money.

Outside of data breaches, fraud can also be a big issue for businesses: accepting fraudulent transactions is often costly and time-consuming to resolve. For many small businesses, the consequences of accepting a fraudulent payment can be severe. If you sell a product to someone who uses a stolen credit card, you likely won’t be able to recover the product and can even be expected to reimburse the bank for permitting fraudulent transactions. 

To help prevent fraudulent purchases, businesses should consider asking for identification from customers. Asking to see a photo ID from an in-store customer is a quick and effective way to verify the person in front of you matches the name on the credit card. There are a few key things to look for when inspecting a credit card for legitimacy. The account number on the front of the card should match the number on the back. The back of the card should contain a hologram, signature panel and magnetic strip. 

What makes online bill pay more secure than offline?

With online bill pay, all payments are received electronically — meaning business owners don’t need to worry about loss or damage to cash and checks, robbery, missing paperwork, and the other risks associated with physical payments. Additionally, online payments are easier to keep track of and manage. Processing transactions online creates a clear record that is easy to reference and find. For businesses that maintain a complex cash flow network of customers and vendors, it’s particularly helpful to have an online record of transactions. 

With a large range of tools and resources at your fingertips, it’s easier than ever to find secure online payment methods and enable safe bill pay. There are lots of options for payment gateway platforms on the market that enable small businesses, who don’t usually have the resources to develop this on their own, to quickly and easily set up online payment systems that offer a high level of online payment security and are consumer-friendly. Consumers can help in this process by creating strong passwords for online payment accounts, never reusing passwords between sites, and maintaining up-to-date anti-virus software. When making the move into online payments, it’s important to find a reputable payment system provider that prioritizes security and can help you understand small changes you can make within your business to support greater security. Small businesses don’t need to get rid of offline payment methods, but should aim to offer both offline and online payment solutions in order to best meet their customers’ needs. Some payment providers will offer solutions for both, which can be helpful in centralizing record keeping. It’s best to offer your customers as many secure payment methods as possible, so that they can choose the one that best suits their preferences — ultimately, making it faster and easier for your business to get paid.

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