Despite making the digital transition, many small and medium businesses (SMEs) struggle when dealing with core payment issues. True, payment processing can be complicated. But it is an important part of a customer’s user experience (UX) and your relations with buyers and vendors. It has an impact on your business’s growth. Real-time, AI-powered automation tech helps optimize a business’s financial operations, including payments. It offers the solutions that best fix the problems specific to your business. This lets you fully tap into digital tools and services to meet customer needs while lowering your costs, saving time, and reducing risks. In this article, we look at five pain points in payments that growing companies face.
Payment Pain Points E-commerce Merchants Face
Various factors have an impact on payment processing. But many of the challenges related to e-commerce payments can be dealt with quite easily. It only needs the right understanding and approach.
Here’s a look at five payment pain points that merchants usually face and how payment automation helps resolve them.
1. Tech Integration
Integrating different payment methods or syncing your incoming payments with account processing isn’t as tough as it seems. But often, companies find integration to be one of the most challenging aspects of payment processing.
A trusted service provider like Novalnet can help you to fully automate your payment processes. They can help you seamlessly integrate any new tech-based financial service or tool with your current operations. Also, if you get a merchant account, you get access to all analytics and CRM, making integration a smooth and transparent process.
2. Payment Declines
According to a report, 75% of online shoppers want faster checkouts, and 56% want more payment options. And a good 26% of shoppers abandon their cart if the checkout process is too long/complicated. Transparent and immediate transactions are what customers need. But many times, the reasons for payment declines are out of the control of merchants. For instance, incorrect data entry by a customer.
However, you can take steps to reduce such kind of checkout friction. For instance, you can use save customers’ payment info via card-on-file to avoid incorrect data entry. You can use auto updaters to update expired card/ payment details, etc. By having auto-updated, stored credentials, you ensure a customer can complete their payment without any hassles, and thus, enhance their UX. Using automation helps a business to optimize their tech stack to simplify payments, and keep issues like payment declines to a minimal.
3. Managing Cash Flow
One of the biggest challenges in payment operations is cash flow. Bad cash flow can disrupt growth. Yet, cash flow management often ends up being a low priority for most businesses, which is why bad cash flow afflicts more than 80% of SMEs. Lack of visibility, late payments, data entry errors, etc. – are issues business owners cite as major reasons for poor cash flow. With payment automation, you can firstly, offer variety in terms of payment methods. This is a must-have for any current-day business. Secondly, you can streamline your AR and AP processes to have accuracy, clarity, and speed in your cash flow management. You can also automate other payment operations like invoicing, payment collection, reminders, reconciliation, etc.
It also gives you accurate visibility of spending, monthly cash flow, vendor and customer details, payment history, etc. It offers features like auto-tracking to stay updated on due or past payments. These become valuable for better planning and more robust performance.
4. Fraud Risks
More than 60% of small businesses cite payment fraud as a major concern. Manual AR and AP processes are prone to errors. Error-prone data gives rise to issues like limited visibility of payment data, lack of risk analysis, etc., which create a higher chance of data breaches and fraud. Not having strong security practices can leave you vulnerable. Payment automation centralizes all your accounting processes making them less prone to errors. This also helps you monitor large volumes of transactions and payment data with speed and accuracy.
With AI-based risk management tools, merchants can analyze payment data in real-time and learn from these patterns, constantly updating themselves to detect fraud and suspicious activity. These tools allow you to perform a host of tasks to prevent fraud – from intelligent risk analysis, to authenticating genuine customers, to blocking out fraudulent transactions. As a business in Europe, you must use strong customer authentication (SCA) as per the latest PSD2 laws. Using tools like 3D Secure and setting up dynamic risk rules helps you prevent fraud and keep your business and customers safe.
5. Payments Compliance
Payments compliance are a must for all businesses. Failing to adhere and comply with local and international laws can turn out to be costly – from expensive fines and penalties to potential blacklisting of your business. If you also deal in cross-border payments, even more laws come into play.
There are four main payments laws in Europe – PSD2, PCI DSS, GDPR, and AMLD. All of these are aimed at protecting consumers and businesses from fraud and prevent money laundering and terror financing.
Hence, a business must ensure they are compliant with all of these laws to avoid disruption. Working with a payment service provider like Novalnet helps you to address all of these areas. We handle all of your payments compliance issues, so that you can focus on running your business.
Get Your Payment Issues Sorted with Novalnet
We offer payment solutions that help you deliver the best customer experience reducing the pain points. As a global payments platform, we process millions of transactions every day for 15,000+ customers worldwide. Our B2C, D2C, and B2B payment solutions fit businesses of all sizes and scopes. A single contract gets you everything you need – from processing payments to sending payouts, preventing fraud, and managing subscriptions.
Plus, our fully secure payment ecosystem is approved by the BaFin and other EU regulatory bodies and is backed by AI-powered risk management. So, you and your customers can be confident that every transaction is secure. Further, transactions are processed in our PCI DSS certified platform, which cuts the need for you to obtain your own certification.
Reach out to us today to know more.
Jose Augustine is the Chief Business Development Officer at Novalnet with extensive experience in European payment industry and a knowledge powerhouse.