Negosentro|How Digital Payment can Benefit Entrepreneurs|Nowadays, several people do not carry physical cash with them because they are using digital payment methods. Payment apps such as Venmo, Paypal, Zelle have made people addicted to digital payments in the last two decades. The digital payment system connects the entrepreneurs with the banks, suppliers, employees, suppliers, and new markets essential for their products and services. It is the most secure and fastest way of payment. The cost of payment between entrepreneurs and suppliers, employees, customers, and governments will be reduced through digital payment.
Here are some of the benefits of digital payment :
Increased efficiency and profits
Digital payment is very beneficial to entrepreneurs in numerous ways. One of the benefits to them is increased efficiency and profits. It is beneficial for every business whether the business is small scale or a large scale business. Through digital payment, the small scale entrepreneurs can track their daily sales, track their inventory flow, and work on improving their profit margins. On the other hand, the large scale entrepreneurs can easily access the digital application for e-filing, e-payment of license fees, registration fees, income taxes, and property taxes. This will save their time as well as the traveling cost. The digital payment methods will increase the interaction of the entrepreneurs with vendors, clients, and financial institutions along with that there will be an increase in their participation in the eCommerce business.
Transparency and security
Digital payment enables the entrepreneurs with the record-keeping and improves the transparency to track the records. This would not be possible in case of the cash transaction because they are difficult to trace. The entrepreneurs using digital payment methods have less cash at their business premises and have less risk of theft.
Empower women entrepreneurs
The digital payment system is more important for the success of female entrepreneurs. Several women have recognized the importance of being independent and they are willing to start their own business. In countries like India, women have limitations of long travel distances, social norms, and family responsibilities. Digital payments can help them overcome these limitations by making it easier for them to access payments through mobile phones. They do not have to travel long distances to receive payment form the supplier and deposit in financial institutions. Additionally, digital payment also ensure that the women’s money is private and secure. It prevents theft and demands from their male partners.
Digital payments of wages
Business owners making wage payments through digital payment have saved their time as well as money compared to writing checks. The employees also benefit by getting a direct deposit in bank account as it saves time and accounting hassle. The Digital payment system also ensures the accuracy of the wage paid to the employees. The timing and amount of the wage payment can be easily tracked at the time of audits and accountability.
Improved access to credit
Digital payment system not only benefits the individuals, it also benefits the entire society. According to the statistics, more than 2.5 billion people remain unbanked, including almost a quarter of entrepreneurs in developing countries. The digital payment system enables entrepreneurs to make more financial transactions that result in increasing their financial transparency. The entrepreneurs are benefited from improved access to credit because every entrepreneur needs a bank loan to expand its business. The small scale entrepreneurs lack access to credit because of high-interest rates and rigid collateral securities requirements. In the United States, the inclusion of utility and telecom payment companies has reduced the share of adults who belongs to low-income and minority communities.
The implementation of the digital payment system will encourage the regulated procedure for businesses. Governments also benefit from the digital payment as they can track transactions, increase accountability. It also helps in improving tax collections. The digital payment can improve the efficiency of the government programs and initiatives taken for the small scale businesses. Through digital payment, the amount will be transferred to the beneficiaries’ accounts. There will be an increase in financial transaction transparency.
Piyush Jain is the founder and CEO of Simpalm. Piyush founded Simpalm in 2009 and has grown it to be a leading mobile and web development company in the DMV area. With a Ph.D. from Johns Hopkins and a strong background in technology and entrepreneurship, he understands how to solve problems using technology. Under his leadership, Simpalm has delivered 200+ mobile apps and web solutions to clients in startups, enterprises and the federal sector.