2020 was a tough year for most companies. In most countries, governments arbitrarily forced many legitimate companies to close their operations, terming them non-essential.
Many of them like restaurants and bars went out of business while those that remained are having relatively thin margins. Fortunately, the crisis has forced many companies to embrace change.
In this article, we will look at ways in which companies are reducing costs and boosting efficiency by taking up digital payment solutions.
Companies are embracing digital payments:
A study conducted by McKinsey in 2020 found that 78% of American companies were embracing digital payments. That was a substantial increase from 72% that were accepting these payments in 2016. 58% of these companies had more than 2 payment providers while 20% of them had at least one.
There is further evidence about this when you look at companies that are providing the solutions. Some of the most prominent ones are firms like Visa, Square, Mastercard, and PayPal.
In the past few years, these companies have done so well that they are now some of the biggest companies in the United States. Companies like Square and PayPal now serve millions of American companies.
This trend is not happening in the United States alone. It is happening in developed, emerging, as well as in other developing countries. Indeed, one of the biggest Brazilian companies by Market Cap is StoneCo. StoneCo is a payment provider that helps companies accept cash and is valued at more than $21 billion. It counts Warren Buffett as one of its shareholders.
Digital payment companies becoming popular:
There are several types of digital payment companies. First, there are wallet-based companies like PayPal and Skrill that help people send, receive, and spend money online. Second, there are others like Wise and WorldRemit that allow people to send money globally faster.
Third, there are digital companies like Coinbase and Binance that help people deal with cryptocurrencies. Further, there are digital card companies, peer-to-peer payment companies like Venmo, and hybrid companies that do all of these.
Most of these digital companies have been helped by a number of background technologies. For example, companies like Plaid help technology companies to have access to their customer’s bank accounts. There are also cloud companies like AWS and Microsoft’s Azure that provide cloud computing that powers these services.
How businesses can embrace digital payments:
Companies of all sizes and scales can embrace digital payment solutions. To do this, they need to look at the ease of integrating the payment companies into their platforms and the benefits this offers to users. Further, they need to consider how their customers shop.
For example, it would not make sense for some companies to accept cryptocurrencies.
Most importantly, they need to look at the overall cost of incorporating digital payments into their operations. This is because some payment options are relatively expensive to implement. To compare the various options available, using a good money transfer comparison company can help save them a lot of time and money.
Companies from across the world have embraced digital payments. At the same time, the number of companies offering these services has been on an upward trend and many of these can be found on MoneyTransfers.com. This competition has made the industry efficient and cost-effective for companies to use.
As written, we believe that businesses in all industries will embrace the technology in 2021.
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