As consumer adoption of electronic payments has skyrocketed, businesses have been following suit with the need for, and benefits of, electronic payments becoming even more pronounced in the wake of the COVID-19 pandemic. Using our e-payment systems can help your organization pay vendors quickly, reduce risk, reduce costs, and increase control.
Electronic payments are a way of making transactions and paying bills online, through an electronic medium, without the use of physical checks or cash. The most popular methods of electronic payments include credit cards, debit cards, virtual cards, and ACH (direct deposit, direct debit, and electronic checks).
With digital payment modes, the hard costs and fees associated with traditional B2B payments like checks are no more. In the context of accounts payable, electronic payments are a win-win. They reduce costs, improve relationships, increase visibility and provide enhanced security.
By using a holistic e-payments strategy, businesses can save 80% on payment processing costs. Businesses can improve their supplier relationships by enabling small and medium-sized payments that are quicker, more secure, and include rich remittance data for easier reconciliation. The best payment systems offer increased security and stronger fraud prevention to make it easier for your business to collect payments.
Payment system types provide your business with greater visibility into payment statuses, financial metrics, and accurate audit trails. They additionally reduce the costs and probability of data entry mistakes. There are many different electronic payment types. Here we discuss the pros and cons of each.
There are many electronic payment types and it’s likely that your business will utilize a combination of payment methods. In order to reap the most benefits, it’s important to understand the benefits and risks of each option. Some methods are better suited to certain situations, for example, ACH credit pushes are best for recurring service charges or mortgage payments whereas virtual cards are ideal for sending highly secure vendor payments.
ACH debit pulls are most commonly used for payrolls, such as direct deposit, and online payments. ACH debit pulls work via an electronic batch payment system wherein the payee or vendor initiates the “pull” of funds owed from the payer’s account. Pros: ACH debit payments are typically low-cost, if not free. Cons: Pulls can take several business days to process and are high-risk compared to other e-payment options as vendors have access to your account information.
Get paid faster. This is an electronic payment system type used by multiple vendors to make known vendor payments. It works via an ACH batch payment system as opposed to a single payment transaction initiated by the payer, which is what an ACH pull is. There are a few different types of electronic payment systems. ACH payments are significantly cheaper and more secure than credit cards, but they still cost a little money to process. With both ACH debit pulls and ACH credit pushes, transaction data is not automatically transferred, leading to more time spent reconciling invoices.
There are many electronic payment system types. One popular one is credit cards. These are merchant-initiated transactions paid from the cardholder’s credit line, making them a speedy, personal payment method.
A debit card is an electronic payment method often used to pay for retail purchases. The cardholder must possess available funds in a bank account to cover the cost of any purchase. Like credit cards, debit cards are most frequently used to make retail purchases and are merchant-initiated transactions. However, instead of charging funds to the cardholder’s credit line, these transactions are pulled directly from the cardholder’s bank account. Commercial cards are low-cost, speedy, and fairly secure. Cons However, they are difficult to track and reconcile from an invoicing perspective. Here’s how businesses can transition from the hassle and risk of paper checks to an electronic payment system.