Why all businesses should let their customers pay like Uber

Industry disruptors like Uber introduced consumers to a seamless payment system – a sales process customers now expect.

Business software management expert Adrian Floate said business payment processes were long overdue for an overhaul.

“Easy, app-based payment systems are now available for all types of businesses,” Mr Floate said.

“Having a workflow payments model like Uber, that allows you to charge for goods and services on delivery in real-time is the way of the future.

“All business should implement the right tools and processes to enable the pre-authorisation of payments from a customer’s credit card to process payments efficiently.

“If this isn’t practical for your business, you should at least be able to invoice a customer at the touch of a button once products and services are delivered.”

Mr Floate said the latest business transaction software streamlined the point of sale (POS).

“App-based payment systems benefit customers, businesses and the overall economy,” he said.

The benefits for customers:

• Enhanced customer experience – Using apps for payment is fun. Customers can download the app, enter their details and scan their credit card to start purchasing goods and services from a business. Payments can be made online, over the phone, in-store or on-the-go.
• Convenience – Contactless transactions are safer than using cash to prevent the spread of coronavirus. Built-in tap and go technology saves time. Customers can pay in any currency, wherever and whenever they require.
• Transparency - Customers can view all invoices and transaction history, with notifications on due and overdue payments.
• Security – Mobile payment apps use encryption technology known as tokenization. This technology replaces personal card data with a number, so no sensitive data is exposed during the authorisation process.

The benefits for business:

• Better cash flow – Making it easy for customers to pay is the key to fast payment. Payments can be made when the goods or services are provided. Payment plans can be negotiated or recurring payments set up. Customers can pay off one, multiple or all outstanding invoices at the same time.
• Efficiency – Virtual cash registers can be set up on tablets. Integrated Eftpos can connect all terminals to the cash register or point-of-sale system. This can help reduce queues and increases sales during busy times.
• Transparency – Provides strategic ways for business owners to manage their payments and provides data collection and analysis. The latest POS technology provides easy access to e-invoices and records during tax time and auditing.
• Security – Good payment systems offer anti-money laundering (AML), know your customer (KYC) and two-factor authentification (2FA).

The benefits for the economy:

• Increased cash flow – Late invoice payments and a lack of payment methods costs Australian small businesses a combined $20 billion each year. By encouraging customers and suppliers to pay on time increases the amount of money flowing through the economy. It increases the growth potential of a business and the ability of business owners to invest and access finance.

Mr Floate said innovative POS software saved time, money and resources for businesses, suppliers and customers.

“Despite the advantages of app-based payment systems, many businesses only offer outdated and inefficient payment options,” Mr Floate said.

“Many business to business (B2B) payments are made through bank transfers, which can leave businesses exposed to fraud and security breaches.”

Business applications for JobKeeper this year highlighted a lack of seamless systems and processes. It is estimated 85 to 90 per cent of small businesses that applied for funding use paper and spreadsheets to track their data.

Of all trade between Australian businesses, 53 per cent of invoices are paid late at an average of 23 days. Another 20 per cent of paid invoices are the incorrect amount, while another 20 per cent are sent to the wrong address. This costs small businesses more than $7 billion each year alone in working capital.

Mr Floate said business owners need to embrace the new technology available to ensure they get paid on time.

“Customer experience and ease of payment should be the main goal for business owners in all of their transactions,” he said.

Adrian Floate, managing director of Cirralto