The rapid growth of the e-commerce industry has led to a slew of companies and businesses transitioning to the digital space. To accommodate the massive customer base, these companies and businesses have had to apply for a high risk merchant account.
Merchant accounts allow businesses to accept card payments. What makes them high risk is the average amount of monthly sales. A company or business that makes at least $20,000 needs high risk merchant services to process their payments.
Now, considering that e-commerce sales have been on the rise in recent months makes the need for a high risk merchant processor even more important. With that being said, the rise of e-commerce has led to a renewed interest in online payment.
However, it’s important to be critical about this. Given the trajectory of online shopping, it’s important to ask if online payments and high risk merchant processing will continue to develop with the e-commerce industry.
Are online payments here to stay or are they just a passing fad waiting to be phased out? If you want to know the answer to this question, read on as we reexamine online payments and what they have in store for consumers and businesses in the future.
To fully understand the future of online payments, it’s important to examine why they’re vital to businesses in the first place. It’s a common misconception that online payments are just about the transfer of funds.
While sales are indeed a factor, there are other advantages when it comes to making use of online payments for your business. So what other functions do online payments serve for businesses that have taken their products and services to the digital space?
Online payments have made it infinitely easier to conduct transactions in the digital space. No matter what time of day, everything is at the tip of the consumers’ fingers. So much so that purchasing something is as easy as clicking a button.
Through online payments, consumers can now do everything from their groceries to clothes shopping from the comforts of their home. It’s in the business owner’s best interest to make this process as smooth and efficient as possible.
In a hyper-competitive industry such as e-commerce, any advantage should be utilized. Indeed, convenience is a premium when shopping online and could very well be the determining factor on whether your business converts on a lead or not.
It’s not at all surprising to know that giving consumers online payment options will lead to an overall increase in sales. The internet is perfect for shopping as it is accessible 24/7, which gives you an unprecedented amount of access to your customer base.
However, it’s important to note that providing online payment options is only half the battle. Optimizing your online payment options should also be a priority. In fact, businesses and brands with optimized online payment processes give put themselves in a prime spot to maximize sales.
Most people think that accommodating online payments will be resource-intensive for a business. And while high risk merchant services providers do demand relatively higher fees and stricter terms, these are often counterbalanced by the increase in sales.
Online payments streamline the entire process, cutting down on inefficiencies that bog down transactions. This in turn can lead to some pretty beneficial outcomes for both businesses and consumers.
In fact, businesses could even reduce their spending by offering online payments. This is especially true if a business opts to pivot to digital, saving them a significant due to reduced personnel costs. This is beneficial for both the consumer and the business, allowing both to save in the long run.
No piece of technology is perfect and online payments are no exception. Now that the benefits and advantages of online payments have been discussed, it’s also important to be aware of the disadvantages that come with online payments.
By knowing about the downsides and pitfalls of online payments, we’ll be able to determine whether or not this technology is really here to stay. It also contextualizes the developments and innovations that are in the works when it comes to improving online payments.
Just like other forms of technology in the digital age, online payments are targeted by cybercriminals. In fact, 27% of online sales end up being fraudulent transactions. Considering the kind of revenue that e-commerce brings annually, this is a problem that shouldn’t be taken lightly.
Cyber threats vary in complexity. They come in different forms ranging from simple phishing attacks designed to trick unwitting individuals to more elaborate attacks such as malware that can steal financial information from a device.
To add to this, you also become responsible for your customer bases’ financial information once they choose to transact with your business. If your systems ever get compromised, your business will be paying a hefty amount in damages.
As we’ve already mentioned above, a high risk merchant processor will charge your business service fees. Fees for high risk merchants are higher than those that are considered low risk.
There are several factors that determine risk. The industry that your business falls under is a pretty significant factor. Casinos, travel, and pharmaceuticals are classified as high risk and will require high risk merchant services to process their online payments.
Aside from the fees, there are also high risk merchant processors that aim to take advantage of businesses. This is why business owners always have to be vigilant when selecting who to work with, as it can be quite easy to fall under the ruse of a predatory institution.
Lastly, online payments aren’t immune to technical issues. While convenient, online payments can be crippled by a slew of different factors that are out of anyone’s control.
An internet outage or server problem could stall online payments indefinitely. Unsurprisingly, brick and mortar store transactions don’t have this problem as customers can opt to pay in cash.
This can really bog down the entire process. And considering that online payments are known for their convenience, this downside is pretty significant. This is especially true if your business operates solely on the internet.
Give, those downsides one question remains: are online payments here to stay? One important thing to understand about technology is its propensity to evolve and change depending on a specific need or issue.
When it comes to technology, issues and problems are just an opportunity for innovation. Online payments are no different. The future of online payments is one that aims to optimize the entire process. Its developments are geared towards making it safer and more efficient for all parties.
Online payment services nowadays function as a mediator between a financial institution and the business that the consumer is purchasing products or services from. However, a new trend may change this completely.
Through the use of a smartphone app, individuals can now transact with each other securely and efficiently. Mobile or digital wallets offer peer to peer transactions between individuals and businesses.
This is a form of cashless transactions that put convenience at the forefront. Because the transactions are peer to peer, they are processed instantly without having to go through a middle man.
Cryptocurrency is often touted as the currency of the future. However, people are still at odds about whether or not cryptocurrency will take precedence over the mainstream currency that we use today.
While people are still debating the merits of cryptocurrency, there’s no questioning that blockchain may just redefine online payments. Simply put, a blockchain is a digital record of transactions. Think of it as an incredibly secure ledger that features near-instant verification.
Given the nature of the technology, blockchain is ripe for online payment integration. Blockchain can transform online payments to help make them more secure without having to sacrifice speed and convenience.
Lastly, if there’s one thing about online payments that will surely it’s how they will be optimized towards improving the overall customer experience. Convenience is vital to the success of online payments. This is why they will continuously be optimized to be as easy to use as possible.
Whether it be through biometric identification for transactions or transactions via voice enabled digital assistants, transactions will only get easier as with innovation. This will prove to be beneficial for both consumers and businesses, as transactions become more efficient and convenient.
We hope that this has shed a little light on the complex world of online payments. Hopefully, we’ve convinced you that this technology is here to stay and is definitely the way to go if you’re looking to grow your business.
If you’re looking to bring your business to the future and incorporate online payments, be sure to check out Processing Card. Applications for high risk merchant accounts can be processed within 24 hours, allowing you to hit the ground running. For any more questions, get in touch with Processing Card today!
Wilbur has been writing about mobile payments and point of sale since 2012. He's now leading the content development for Processing Card and is always thick searching for information.
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