Around the world, consumers are rapidly switching from cash to digital payments. While the move towards a cashless society has been in the works for some time, the boom of digital payments during the Covid-19 pandemic has only accelerated this, and businesses that don’t offer this type of payment are quickly being left behind.
Recent reports suggest that 90% of consumers in both the US and Europe have made some form of digital payment in the last 12 months, so it’s vital that businesses take note. Ready to accept online payments and move your business forward? Here’s what you need to know about digital payments for business in 2025.
The Rise of Digital Payments in Business
The increasing use of digital payments in recent years highlights the growing customer demand for convenience and speed, along with security, when it comes to making purchases both online and in stores. But before we look at why this is happening, we should first look at what digital payments actually are.
Virtual cards and digital payments are stored bank account details, credit and debit cards, and loyalty cards used online or via contactless payment on a smartphone or other smart device. These are typically held in a digital wallet, such as Google Wallet or Apple Pay. Third-party apps like PayPal, Venmo, and Zelle are also popular methods for paying for goods and services online or sending money to friends and family.
As more people begin to rely on digital options for their finances that go beyond online banking, businesses must adapt to these new payment methods with more advanced point-of-sale (POS) systems. Offering cashless options for payment can make a small business more accessible, both online and in-store, while more advanced technology like Buy Now Pay Later (BNPL) can be a good option for customers looking to make large purchases with your business.
Benefits of Digital Payments for Business
There are numerous benefits to small businesses in accepting digital payments. For busy stores, digital payments significantly improve the speed of transactions by reducing the time needed to handle cash.
Not only is this beneficial for the business in being able to process transactions more efficiently, but it also improves the customer experience in several ways. Customers are able to complete their purchase faster, while digital small business payments are also more convenient for many people so will attract them to shop with you again.
For business owners, digital transactions make managing your money easier. Payments are recorded electronically to create automated reports, making your bookkeeping and tax filing more streamlined. You’ll be saving time on your finance reconciliation, all while reducing possible errors from manual cash-counting.
Finally, by accepting multiple forms of payment including digital options, you’ll be staying ahead of competitors who still aren’t implementing these systems within their own businesses. With online shopping continuing to rise alongside cashless payments, businesses maintaining only traditional in-store purchasing options will likely fall behind and lose out on valuable customer opportunities.
Security and Fraud Prevention in Digital Payments
Introducing digital payments into your business will most likely bring up questions around security and fraud prevention, particularly around how you can prevent cybercriminals from accessing yours and your customers’ financial data. These are important concerns to take into account before moving ahead with digital payments but by implementing security measures, you can rest assured that your data is safe.
PCI Compliance
If you currently accept card payments in your business, you should be familiar with this already. PCI compliance ensures that customer information is handled safely through secure networks and transaction monitoring. Your POS for accepting card payments should have this built-in, so implementing this with digital transactions shouldn’t be difficult to set up.
Encryption
By using encryption technology, payment method details are converted into an unreadable code while processing the transaction. This makes it almost impossible for cybercriminals to take the customer’s details and use them in the future. Using encryption technology can significantly reduce the risk of a data breach.
Multi-Factor Authentication
Using multi-factor authentication (MFA) requires additional security steps to be taken before an account can be accessed. Biometric data like fingerprints or facial recognition are now common practices when working with digital payments, both for customers and businesses.
The customer can set this up on their end by implementing MFA on their digital wallet, while business owners can also use this technology with one-time passcodes when accessing POS transaction details.
Fraud Detection
Many new payment processing tools now use machine learning and artificial intelligence (AI) to monitor for unusual payment activity on accounts. They typically do this by analyzing patterns and flag any unusual activity they see for review by the business owner or bank. This helps businesses to respond to any possible fraud in real time, preventing it from escalating further.
How Digital Payments Improve Business Efficiency
Along with faster transactions and better financial management, there are several other benefits that come with accepting digital payments as a business. One of the most important for business owners is the reduced operational costs that come with these types of transactions. Cash purchases often require additional security and transportation, along with possible deposit fees at the bank. With digital payments, businesses aren’t subject to these costs.
Another, often overlooked, way that digital payments improve business efficiency is their ability to tie directly to inventory management. By integrating your merchant services accounts to your inventory software, you can work from real-time stock levels that help you order new stock more efficiently and prevent over or understocking.
The digital nature of these payments also means that you can keep earning, even when your business is closed. By accepting online payments through your website, your business can process payments 24/7, helping you expand your market reach and generate income around the clock.
Future Trends in Digital Payments
As consumers continue to use digital payments more frequently, staying on top of emerging trends is vital for business success. Some of the current trends looking likely to grow over the coming years include expansion in areas like Buy Now Pay Later and contactless payments, along with biometric authentication when using digital wallets.
Embedded payments are also becoming popular with businesses who sell on social media sites and through third-parties. This technology allows customers to make purchases directly within these apps, rather than going to the businesses website. Digital payments allow them to make one-click transactions through these apps in a secure way.
Look to the Future With Moody Bank
If you’re looking to expand your business transaction options for your customers, contact the team at Moody Bank today.
Our team of expert commercial bankers can help you find the right products and services that fit your business needs, including additional merchant services options that give your customers more ways to pay with low processing rates for you as a business owner. We’ll work with you to setup automated fraud protection like ACH blocks and filters, along with business bill pay and automated online accounting that connects to your POS system.
Contact us today to get started or visit one of our convenient locations around Houston, in Austin or Galveston to speak to our business team.