We’ve all been told that cash is king, but paper currencies are falling out of favor – especially since the pandemic broke out. In 2020, paper cash only accounted for 19% of payments, and according to a study performed by the Association of Financial Professionals, the use of paper checks decreased by half since 2015. Meanwhile, the use of digital payments, specifically ACH transactions (digital check payments) has doubled. Why?
Consumers and businesses have more options and ways to pay than ever before: different payment apps, mobile payments, contactless payments, etc. Most people now can place an order online for delivery and can even go to the store to have it brought out to their car. More and more business owners are realizing that convenience is king, and digital payments streamline their business, which helps them stay competitive, get paid more, and get paid faster.
Waiting on customers to pay with paper cash or check can be a nightmare. You may have to wait until their next pay day or until they run to the bank. If the customer isn’t home when you complete their project, you may spend days, weeks or months trying to collect payment.
Credit card and eCheck payments can be taken anywhere there is internet service and will arrive in your bank account in a minimum of two business days (five business days is typically the max). You could take the credit card or eCheck payment through your mobile phone, over the phone by typing it into the web portal, or by sending the customer a link to pay online. The convenient online payment methods mean you get paid faster, improving your business’s cash flow.
We are getting closer to a time when all people will be paying digitally for services and products. Digital payments – those made by card, by eCheck, online or via a mobile phone – leave an electronic history that provides more insight for consumers on their spending habits. Customers who pay by credit card or eCheck can track their spending either through the latest budgeting app or directly through their banking portal.
As a business owner, there are perks to apps and digital payment methods too. When using software like Project 2 Payment, payments received can be linked directly to your customer accounts and corresponding projects. This allows you to search by customer name, project, or invoice to see who has paid and when they paid. Electronic search puts the information right at your fingertips so it’s quicker to respond to customer inquiries. With the ability to pull and export payment reports, it’s also much easier to track down who still owes payment.
According to Nature.com’s article “Neural Mechanisms of Credit Card Spending,” when people use credit cards to pay, they lessen the “pain-of-payment” – meaning that they are less concerned about the price. Your customer is much more likely to choose the high-priced finishing touches or replace equipment that is still running but may not be for long when using a credit card instead of cash or check. Cash or check tend to limit options in the mind of your customer, whereas there is flexibility and infinite possibilities with a credit card.
For customers covering emergency or unplanned repairs and expenses, paying with a credit card may be the only option until they can reshuffle finances. Even if the repair will be covered by homeowner’s insurance, it could take weeks or months to get a payment from the insurance company. Accepting credit cards can help alleviate the burden your customers face when they don’t have cash on hand. Make it easier for your customers and allow them to indulge a little if they can by giving them the option to pay with a credit card.
In the past, digital payments appeared complex and expensive. Most small home services businesses felt that only large companies could afford the tools to process online and mobile payments. Some even felt that turning on digital payments meant they needed to hire a full-time accounts receivable employee to maintain payment records or an IT security expert to make sure the digital payment data is secure. Today, this is no longer the case. The right digital payment software will be easy to use and secure for your business and your customers. Payments have evolved, and Project 2 Payment makes it easy and affordable to accept and track digital payments to keep your small business moving forward.