How Digital Payments Are Revolutionising Business Payment Processes

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Digital Payments

A couple of years back, my sister introduced me to online stores. And, since then I have remained glued to online shopping for almost everything such as apparels, grocery, food, footwear, books, accessories, kitchen utensils and appliances, home décor – you name it and I will have it ticked off. Initially, I used to select the Cash on Delivery option for payment, simply because I wasn’t confident about sharing my credit and debit card details with a website – thanks to all the news revolving around about phishing and data insecurity. But, this payment method soon started becoming a hurdle in my daily routine because many times either I had to postpone my schedule or rush back home to receive a delivery. This encouraged me to attempt online payment, and I was glad at the way it simplified shopping. And, trust me, now I prefer digital payment over cash transaction- at both physical stores and online stores!

This personal experience left me wondering, if digital payment had such an impact in my life, how it must have revolutionised the business sector. To begin with, banks and non-banking financial companies have been gradually moving away from the four-walled brick and mortar set-ups by embracing digitization for their services. For instance, to apply for a personal loan, or any other loan, you need walk up to the bank; rather choose to conveniently apply online. This development in the financial sector has made it imperative for corporates and vendors to realise the benefits of conducting business digitally.

One of the main challenges faced by businesses is delayed payments. Delayed payments adversely affect the entire business cycle – operations, inventories, management, and miscellaneous expenses. Factors such as postal time for cheques/Demand Drafts to reach you, formalities for clearance of cheques/Demand Drafts, approvals on payment orders, and other such long processed formalities results in the overall delay of payment in entire the trade cycle. In such a scenario, digitisation of payments makes way for a hassle-free payment process by:

i. Enabling instant payments regardless of whether the sender and receiver are in the same town, district, or country;
ii. Increasing the speed of payments by easing the process of making and receiving payments;
iii. Reducing processing and transaction cost by up to 90% as compared to cash payment;
iv. Becoming more efficient in tracking and controlling expenditures;
v. Improving traceability and controlling of expenditures;
vi. Increasing privacy and security of payments, and reducing associated crimes;
vii. Increasing the transparency of payments and providing a first entry point into the formal financial system;
viii. Increasing risk management capacity of corporates or individuals.

Needless, to say the above-mentioned will remain advantageous provided we have adequate infrastructure for a universal, affordable, easy, integrated, and secure platform for digital transactions. Digital payments have already started revolutionising the business arena, and with changing economic landscape it is pertinent that all businesses move towards digitisation. And, remember, efficient use of this technology can effectively transform the financial lives of not only businesses but individuals too!

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