Today, with the many ways you can make your payments, there are a lot of misconceptions and myths which can make things stressful. Below we have debunked three of the most common misconceptions about these payment methods to relieve some of that stress.
From the humble beginnings of bartering and coins to today’s card transactions and programmable payment infrastructures, the finance world has consistently been an industry of innovation. This cycle of rapid innovation and continuous incorporation of ever-evolving fintech has created some common misconceptions about the state of modern payments, forcing business leaders to carry out the same payment processes as the business leaders before them.
The widespread acceptance of untrue information around online payments has muddied the waters—causing businesses to offer stress-inducing payment processes to their customers.
To help businesses navigate the world of programmable payments in a digital economy, let’s debunk three of the most common myths around modern payment methods.
Myth 1: Digital payments take 2-3 business days to process.
As consumers, many of us understand that even though we can initiate a transfer with just a simple push of a button, it can still take a few days for the money to show up in our account. In a business setting, customers are increasingly expecting faster payments and transfer turnarounds. To keep pace with their requests, companies need to avoid these delays whenever possible.
Today, funds can be transferred in a matter of hours through the Automated Clearing House (ACH) Network. ACH payments are electronic, bank-to-bank transactions that don’t require any lengthy approval process. With no wait time for approval, ACH transactions avoid the traditional delays usually caused by insufficient funds or unauthorized transfers, giving customers access to their money faster. Avoiding any inconveniences can make a big difference in a customer’s experience.
Myth 2: Debit card transactions come with pricey admin fees.
Debit and credit cards are consistently shown to be the preferred payment method among consumers. For businesses, those types of transactions come with an array of costs. Assessment and interchange fees may be non-negotiable, but processing fees allow for a bit more flexibility. A processing fee is charged every time someone makes a purchase, which serves as the commission the processor receives on each transaction. Customers can be in for a surprise when an assessment, interchange, and processing fee appears during checkout.
Businesses can help customers avoid these surprises though. By offering ACH transactions as a payment option, the customer can connect a bank account and avoid the fees that come with traditional credit card transactions—while still using their preferred payment method. At the same time, customers are avoiding those previously unavoidable processing fees, ACH transactions only cost a business pennies to complete—it’s a win-win.
Myth 3: Online payments have too many security risks.
Headlines can make it easy to believe that digital payments are at a greater risk of security threats than hand-written checks or paper money counterparts, but there will always be risks associated with any method of moving money. Risk isn’t directly tied to online transactions. In fact, online payments come with relatively low risk if done correctly.
Last year, the Federal Reserve conducted a survey and found that payment fraud “represents only a fraction of 1 percent of the total value or number of payments.” Businesses that offer an online payment option and stay up to date with security practices by regularly testing, assessing, and improving their security measures are best prepared to deflect a potential threat. Preparing for worst-case scenarios at all times can help a company in the case that something does pose a threat.
Organizations looking at an online payment offering may face some difficulty since there are a plethora of laws determining what a payments company is and isn’t allowed to do. But paired with the right practices, programmable payment infrastructure is capable of taking all of these obstacles and simplifying them for both end-users and employees. These modern infrastructures can save businesses from implementing stress-inducing payment processes.