In a modern world where we are slowly transitioning into a cashless society, the impact of e-money cannot be understated. While many may use it for its added convenience, it also provides benefits to all businesses – global or small.
Here are 10 ways small businesses can benefit from using e-money.
One benefit of small businesses utilising e-money is that it is cost effective. E-money transactions are facilitated through online payment gateways. This is because e-money can be wired between bank accounts quickly, helping streamline the payment process. Over time this will prove to be a cost-effective method for small businesses because online transactions only require a small fee – which is typically lower than credit card fees as well. Not only will it cut costs down, but it will also save time since employees will not need to manually count cash or take it to banks.
E-money has been adopted globally to the point where it has become a stable form of currency. This stability enables foreign transactions – which can help a small business become accessible to a wider audience.
While this point might sound paradoxical due to the ever-increasing number of fraud and theft cases, e-money does provide security where cash does not. With e-money, small businesses will not need to transport large piles of cash. Instead, all business transaction can be conducted online with no risk of cash being stolen.
While it is somewhat true there will always be a paper trail, businesses do not want to waste time looking for a paper trail. This is where e-money can come in handy. Electronic transactions will always be recorded on bank accounts, which can aid small businesses in managing their records and finances. Online recordability also helps cut down paper wastage.
This point pertains particularly to small businesses who have implemented a catalogue or subscription models. For example, if the business offers monthly magazines or beauty products, its customers can set up a direct debit payment. This way customers can have monthly purchases set to occur automatically. This added convenience for customers helps ensure long-term loyalty for the business.
No waiting for paper cheques
Another benefit for small businesses switching over to e-money is that it can help improve cash flow. For example, creditors can often clamp down hard if a business owes them money. This situation can become particularly volatile if the business is waiting for paper cheques to be delivered. With e-money this can all be avoided since money can be paid directly into bank accounts.
Online shopping isn’t limited to 9-5
Another useful benefit for small businesses who utilise e-money is that their customers can shop with them at any time. Providing the business has a website to facilitate online transactions, people who work between the hours of 9am to 5pm can shop outside of those hours. Even if the product will not be dispatched until the next day during working hours, 9-5 workers can still make their purchases outside of working hours thereby expanding the businesses’ customer base.
Heading to a shop might require customers to pay for fuel, train fare or bus fare. Equally, sending cheques in the post will require postage stamps. By giving customers the ability to shop online these costs are eliminated from the equation. By providing them with a cheaper alternative, customers will be more likely to stick with the business.
There’s no need for a headquarters
When small businesses are establishing themselves in the commercial or private world, it can be difficult to determine how costs should be spread. With e-money there isn’t a concrete need for a central headquarters. This is because the majority of work can be conducted online meaning a headquarters is not a necessity for the business. The capital needed for purchasing one can instead be directed to other areas of necessity such as purchasing or creating the product.
A cashless society is emerging anyway
Regardless of your opinions on a cashless society, it is firmly on its way – and as the age-old adage goes, ‘you’ve got to stick with the times.’ It’s estimated that businesses who only accept cash could be losing approximately $100 billion per year. This isn’t to say businesses need to stop accepting cash, but rather they need to add more payment options to attract a wider customer base. Some customers might still pay with cash, but many look for convenience when they are shopping, and convenience is something e-money provides in abundance.