‘Cash is king’ may soon be a redundant phrase thanks to the growing popularity of e-payments. Learn why digital payments are now the norm in business.
Africa lags the world in digital payments absorption, with the notable success of the M-Pesa mobile payments platform marking Kenya as an exception.
Even with its well-chronicled success, M-Pesa does not feature in the top 10 mobile payments platforms in the world, where WePay, WeChat, and Apple Pay dominate.
While the penetration rate is low compared to the global average, African consumers and businesses that have adopted e-payments report major benefits. Mobile payments are now slowly replacing cash as the payment method of choice.
This article explores e-payments and their benefits for businesses. Read on to discover how you can use mobile money wallets, digital wallets, and direct deposits to pay faster and more securely.
What is meant by e-payment?
An e-payment is when you pay for something using an electronic medium, not through cash or cheque. Also known as electronic payments, include any payment made over a digital network.
E-payments usually involve the transfer of money from one bank account to another. The sending and receiving accounts can be held with the same or different banks.
Used for both B2B and B2C payments, electronic payments are not only convenient for the parties involved in the transaction but they are also faster and safer than cash and printed cheques.
While electronic payments have made transacting so much easier and safer for consumers, it’s made an even bigger impact on how businesses pay. Especially since there’s so much more money involved in B2B payments.
What are the types of e-payments?
There are several ways you can make payments electronically. Your choice will depend on what payment method the recipient prefers.
The main types of e-payments are direct deposit, credit and debit cards, digital wallets, and mobile money wallets. You could even add gift cards.
How do I make an electronic payment?
Electronic payments have the sender as the initiator of the transaction and the receiver on the other side. These are the primary players, with the banks acting as the payment intermediaries.
The one who is owed can also initiate the payment by submitting a payment request through their e-banking provider. Intasend, for example, allows freelancers and businesses on its platform to make a payment request to their clients from within their accounts.
The process is simple:
From your Intasend dashboard, you simply click Request Pay under the Receive Payment tab. Click Send Requests on the page that comes up.
A form to create the payment request will come up. On that form are fields for the name of the person you are requesting payment from, their email address, and phone number, and the reason you are requesting payment.
On the same form is also a dropdown menu for currency that lets you choose the currency you want to be paid in. The options are KES, USD, GBP, and EURO. There is a field for the payment amount and dropdown menus for who between the two of you will absorb the card and mobile tariff charges.
After you complete the e-form, the system will send the request to your client along with a link they can use to pay. As well as the link, you will be shown a summary of the payment request, including when the system will send a reminder and the eminently convenient link to share the payment link with the client through Whatsapp.
This simplifies the process of requesting payment. The payment links also make it easier for clients to complete payments. They can do this leak in a few clicks, instead of multiple steps and long forms and verifications.
What are the benefits of using e-payment systems?
Everyone wants to be paid fast and securely. Traditional, in-person payment methods of cash and cheque can take too long, either to deliver or collect the cash or bank the cheque.
Cash payments also carry the risk of loss from theft and fraud.
This explains why e-payments are now the norm in B2B payments. Among the reasons for their widespread adoption are these advantages:
1. Lower transaction costs.
E-payments cost a fraction of what paying by cheque costs, for example. With cheques, the cost of stationery adds up with the number of payments you have to make. There are costs on the recipient side as well. They have to make a trip to the bank to deposit or cash the cheques.
2. Time savings.
Since they are made digitally, e-payments are so fast that with some the recipient can receive their money instantly. This is great for business as it helps you to maintain a healthy cash flow. You can pay for critical supplies quickly so your businesses isn’t interrupted.
In contrast, cheques require you to manually write them first, which consumes time. The cheque may also need time to clear, which can take over a week. This is time the payment recipient may not have.
3. Not affected by physical distance.
Again because they are made digitally, e-payments can be made from a remote location, any time of day. All you need is an internet connection.
For example, if you can log into your Intasend account, you can make or authorise bulk payments from your business account even when you are on holiday at some exotic location.
Similarly, you can request payment and receive it from clients while on vacation as long as you can connect to the internet. With cash and cheque as your only viable payment methods, this isn’t possible. Distance can indeed be a barrier.
4. Visibility over your payments.
By using a B2B e-payments platform like Intasend, not only can you send and receive payments faster and securely, but you also get complete visibility over the payment process.
Through your reports, you can see after only a couple clicks how many payments you have made and requested. You can also see which clients have yet to pay and by how long the payment is overdue.
Unlike cash and cheque payments, you don’t have to manually record your payments after you make them. With Intasend, the system automatically records your payments and generates reports on demand, so you don’t have to waste hours flipping files and peering through cheque stubs to find information for your reconciliations.
The net effect is improved transparency over payments. Automating your payments, thus, gives you greater control and visibility over the process and avails payment information when needed. All this combines to boost transparency in your business.
5. Improved relationships with suppliers.
E-payments, which remove the need for manual entry of payment information reduces the incidence of errors that can result in over or under-payments and the costly outcome where you pay the wrong people.
Such errors present you as clumsy, which can seriously harm your standing with suppliers. Where e-payments that are faster and safer are available, suppliers are less understanding if your reason for not paying them is because your messenger got robbed on their way to deposit your payment.
How businesses can make the most of e-payments.
For e-payments to work, both the payer and payee must have the digital systems and tools in place. For example, a direct bank deposit only works if both parties have business bank accounts. The same applies with mobile payments.
So to fully enjoy the benefits of e-payments, you have to have the infrastructure in place. First make sure you are set up to accept e-payments in your own business. Like Intasend, the platform you choose must have the tools to not only get paid but also to pay suppliers electronically.
With Intasend, you can accept and request payment online, right out of your account. You can securely pay suppliers from the comfort of your office and make bulk payments with one request. For example, to pay salaries or disburse loans.
You can also schedule your payments according to the frequency at which money flows into your business. This gives you greater control over your cash flow and helps you maintain good relationships with vendors and suppliers.
Sign up with Intasend to enjoy the many benefits that e-payments offer and take advantage of the lowest transaction costs on the market and our 100% payment success rate.
