Financial management

3 payment changes that could affect how you do business

- October 16, 2023 3 MIN READ
organising payments, receipts, tax

In the fast-paced world of digital, the payments landscape is continually evolving, driven by technological innovations and changing consumer preferences. In the last year, in particular, the payments landscape experienced several transitions, in response to turbulent economic markets, inflation and interest rate rises, Chris Dahl, co-CEO Pin Payments explains what you need to know.

With the landscape evolving quickly, it’s important to understand how these changes could impact your business, in order to meet the demands of your customers and remain competitive.

3 key areas for consideration alongside your small business’s digital payments

1. Digital payments are here to stay, but will continue to change

The migration from traditional to digital payments is one of the most prominent shifts to have impacted SMEs in recent times, especially since the pandemic. Cash has continued to decline as a payment method, with digital wallets becoming increasingly popular offering consumers a more convenient and secure way to make payments.

However, even in the past year digital payments saw significant changes, a prime example being the rapid rise and decline of the buy now, pay later (BNPL) industry, which occurred due to increased regulatory scrutiny, rising interest rates and greater competition. However, BNLP services added financial pressure on small businesses, who are often charged high merchant fees of 3-6 per cent per transaction.

Keep an eye out also for PayTo, which was recently launched to enable businesses to accept real-time payments directly from their customers’ bank accounts. A number of other countries have had similar systems in place for years (e.g. iDEAL in the Netherlands), which have seen significant uptake from consumers and businesses. Whether customers’ behaviours will change like this in Australia, only time will tell.

2. Regulatory scrutiny is set to increase across both operations and cyber security

The evolving payments landscape has led to the introduction of stricter regulatory measures to combat fraud and money laundering. As fraud has become an increasing risk to business operations, with many notable brands experiencing data hacks these past 12 months, businesses have a greater onus to ensure their cyber security is up to scratch. Whilst compliance can be daunting for small business owners, due to the potential increase in operational costs and administrative workload, the Australian Securities and Investments Commission (ASIC) has recently made it clear that Directors can be in breach of their legal duties if adequate cyber security measures are not in place. small businesses should proactively understand and comply with relevant regulations, potentially employing compliance specialists or leveraging fintech partnerships to navigate the increasingly complex regulatory environment.

3. Customer expectations are now much higher, so your business needs to meet these demands

The demand for seamless, instant, and secure transactions has never been more prevalent, with customers having access to endless information and expecting superior payment experiences. Meeting these needs is crucial for SMEs to retain customers but may require significant investments in technology and customer service. Investing in user-friendly interfaces, secure transaction methods, and customer support can help your business enhance customer satisfaction and build long-term relationships.

The e-commerce surge presents immense opportunities for small businesses to expand their market reach, however, it also requires the integration of efficient, secure online payment systems to facilitate transactions. Embracing evolving tech is essential for small businesses right now to stay competitive, so make sure you offer an array of payment options that cater to a broad customer base to enhance their user experience and boost retention.

Ultimately, the evolving payments landscape is reshaping how SMEs conduct business, bringing forth opportunities and challenges. If you understand the impacts of these changes and strategically leverage them, your business can enhance its operational efficiency, meet customer expectations, and position itself for sustained growth in the competitive market.

This post originally appeared on Kochie’s Business Builders. You can read the original here.

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