7 Top Benefits Of Using Digital Payment Systems For Small Businesses

Dreaming big and running into a cash flow crunch is not ideal for a small business. 

Still, 82% of small businesses that go out of business mention cash flow as the main reason. 

Keeping track of your incoming and outgoing money will help you build a sustainable and profitable business in the long run. 

With proper cash flow management, you can hire people, buy raw materials, invest money in your business, and still pay your bills and make a profit. 

But it's easier said than done, especially if you manage things the old way in sheets.

Some small businesses also use bookkeeping software to track their cash flow. 

Although it's better than managing cash flow in sheets, it often fails to keep track, especially when customer transactions are increasing and your business is growing. 

Then what’s the solution?

The short answer is digital payment systems.

In this article, we’ll discuss what it is and how your business can benefit from using it. 

But before that, let’s quickly understand what a digital payment system is. 

Recap: What is a digital payment system?

A digital payment system, also known as the electronic payment system, allows businesses and individuals to transact through electronic devices like smartphones or computers.

Digital payment systems have become super popular over the years because of their convenience, security, and efficiency. 

Smart payment solutions like Payby enable you to integrate a digital payment system for your business. 

So, whether your customer prefers to pay via a QR code, mobile wallet, or more traditional credit/debit card, you have it all on your checkout page.  

What are the benefits of using a digital payment system? 

The digital payment system has multiple benefits for small businesses. These are:

1. It’s convenient 

Digital payment systems are convenient and, hence, widely preferred by customers.

In the UAE, 88% of consumers mentioned that they have used at least one emerging digital payment method, as Mastercard mentions in one of their surveys. 

The same report mentions that consumers are turning towards digital finance options for their everyday needs because of their speed, convenience, and transparency. 

Moreover, a digital payment system can securely store a customer’s preferred payment options and card details, which means repeat customers don't have to enter the same information again. 

Offering such convenience to customers boosts repeat sales for your business. 

Recommended read: How do payment gateways impact user experience

2. Improves cash flow management

Digital transactions also help small businesses manage their cash flow effectively, enabling you to keep track of the inflow and outflow of funds. 

The transaction history gives you insight into spending trends, cash management, and sales. 

This insight can help you more accurately predict future income and expenses. 

As a business owner, you don't need to wait for checks to clear. You can receive instant payments for products/ services sold. 

Many digital payment systems integrate with accounting software, recording all incoming and outgoing transactions. 

This streamlines the reconciliation process and provides real-time visibility into your cash flow, enabling you to make informed decisions at the right time. 

Moreover, by automating the whole process, you remove the scope of manual error that would have happened if you were keeping track of the cash flow manually. 

3. Enhanced security

Digital payment systems are secured and reduce the risk of fraud as every transaction can be tracked in real-time.

With the help of secure gateways, you can enhance the security of every transaction. 

You can also safeguard customers' sensitive personal data and banking information through advanced security measures. 

With features like data encryption and fraud protection, tokenization of websites, and biometric payment methods, consumers' sensitive information can be kept safe.

For example, PayBy, which enables business growth with cashless payments, is trusted by some of the leading brands in the UAE. 

The brand is also licensed by The Central Bank of the UAE, which helps them earn trust and a good reputation.

It has been given the highest levels of financial service approvals to conduct Stored Value Facility (SVF) and Retail Payment Services (RPS) operations. 

Recommended read: Cybersecurity in digital payments

4. Broader customer base access

Digital payments allow small businesses to increase their customer base. 

With digital payment solutions, small businesses can offer their products/services to non-local customers and all those who prefer online shopping. 

Anyone with internet access can visit your website and make a purchase. 

Digital payments like Payby also empower you to run subscription-based businesses. 

You can simply integrate gateways with your existing website so you can host the payment page and customize it according to your needs. 

Plus, multiple payment options encourage customers worldwide to view and purchase from your website. 

5. Data and insights for better decision-making

Digital payment solutions generate tons of data that can give you a lot of insights.

For example, look into the transaction history to understand what time your sales peak, what are the most preferred payment methods, which is your most selling product, the purchase behavior of the customers, spending trends over the years, and where your funds are used most. 

Scrutinize these data, and you will be able to make a better business strategy that's backed by data. 

6. Shop on the go

The biggest benefit of a digital payment system is that it enables you to do a transaction anytime and anywhere. 

It’s instant, and there’s never a delay due to a nearby ATM running out of cash or you need to wait for a long time in the queue. 

You can continue to do business as usual, even if there's a holiday or a time zone difference for cross-country transactions.

7. Reduce transaction cost

Paper-based payments are a hassle for small business owners and suppliers. 

Besides the hassle, the entire transaction process is slow. 

The entire process of collecting and processing a paper check may take almost two weeks. 

Additionally, collecting and processing paper checks is a costly affair. 

Data says it costs almost $13 to send an invoice and $5 to process a single invoice check. 

Digital payments are easy, hassle-free, fast, and less expensive for businesses. Plus, it’s environmentally friendly too!

Ready to transition to a digital payment system?

If you’re a small business owner, implementing a digital payment solution can be really beneficial to grow your business. 

Payby offers various payment solutions that are perfect for small businesses to scale their business. 

Whether you want to set up QR code payments, payment gateway, virtual accounts, wallets, or recurring payments and auto-debits, Payby has got you covered. 

It also offers the lowest transaction/ payment processing rates, which means you have more control over the revenue you get from each sale. 

Ready to explore?

‍Get started with Payby today.