October 10, 2023
Digital Payment Trends to Help Improve Cash Flow
The past few years have seen a rise of online shopping, greater adoption of contactless transactions, and strong acceleration of digital payments. Consumers want the option to make digital payments and cashless transactions, including using digital wallets, digital point of sale (POS) systems, or other digitally supported transactions.
Small businesses have an opportunity to be proactive and embrace the digital payment options that their customers are already using. By embracing digital payments, businesses are continuing to invest in their customers’ online and digital experience. While there could be some adjustments and costs for small businesses to accept digital payments, there may be some big upsides for the business, too.
Let's look at a few recent digital payment trends and why they matter for your small business.
Online Shopping is Still Going Strong
Although there has been a resurgence of foot traffic with shoppers returning to malls and in-person retail stores after the pandemic, the pandemic's shift to online shopping has not gone away. A recent survey from August 2022 of US consumers found that only 11.9% of customers shop entirely in store. That means 88.1% of customers report shopping online at least part of the time. And 49.5% of shoppers said that they want to see their preferred payment option available.
Some businesses have gotten increasingly sophisticated at offering seamless cross-channel experiences, where customers can buy online and pick up in the store, pay in-person from their smartphone's digital wallet, check the store's available inventory online and buy items at the store with self-service checkout, and other combinations of online and in-person shopping It's beneficial for small businesses to be agile and flexible to offer this kind of convenient, seamless shopping experience – with a full range of digital payment options.
Customers Want a Wider Array of Digital Payment Options
People are getting accustomed to using a wider range of digital payment choices. A recent study from American Express and PYMNTS reported that:
- Frequent digital wallet use for consumers rose from 17% in 2021 to 21% in 2022, and 27% of consumers shared that they think it's “very or extremely important" to be able to pay with a mobile wallet.
- 35% of consumers said that “ease of use" is the most important factor in their choice of payment method.
- 34% of U.S. retailers are looking to use technology to remove friction from the checkout experience.
Make sure your business is aligning your online shopping experience with a digital in-store shopping experience, such as offering digital payment options that customers want like “buy online, pick up in store" (BOPIS), digital wallets, virtual cards, and “buy now, pay later” (BNPL).
B2B Payments: Make the Experience More Seamless and “Consumer-Style"
Small businesses in the B2B space are often looking for ways to get paid faster to help improve their cash flow. A few big trends in digital payments for small business show insights for how to accelerate receivables from B2B customers:
- Make B2B e-commerce more like B2C shopping: People have gotten used to seamless digital payment experiences when shopping online in everyday life as consumers, but this seamless experience is not always happening in the B2B space. This is an opportunity for B2B businesses. Don't make your customers put up with clunky websites or time-consuming manual processes. Make sure your B2B buyers are having a convenient, easy-to-follow, frictionless experience when paying your invoices or purchasing your products and services. A report from May 2021 found that 74% of millennial B2B buyers surveyed decided to change vendors because the new company offered B2B experiences that felt more like consumer payments.1
- Automate Accounts Receivable to get paid faster: Another recent survey from August 2022 found that 80.7% of surveyed small businesses report using an all-in-one payments platform for accounts receivable (AR), because it is convenient and helps saves time.2 Using automation for accounts receivable can help your business simplify payment processes and avoid late payments. The right all-in-one payments platform can help your customers understand their payment options and schedule payments in a way that gives your business smooth, reliable cash flow.
Customers want to be able to do business with your company on their terms, on their time, online or in-person, and paying via your website, a POS app, or a digital wallet or virtual card. Small businesses have an opportunity to adapt and embrace the digital payments future. Meet your customers where they are, let them pay how they want to pay. that will help your business be positioned to benefit from the growth of e-commerce and customer demand for digital payments.
Sources
1 Optimizing SMB Payments Report (page 21), PYMNTS.com, May 2021.
2 THE AP/AR QUICK-START GUIDE: How All-In-One Payment Platforms Can Transform B2B Transactions (page 13) PYMNTS.com, August 2022.
This content was written by a freelance author and commissioned and paid for by American Express. This article contains general information and is not intended to provide information that is specific to American Express products and services.
