A small business guide to digital payments
In the ever-changing landscape of modern finance, millions of small businesses are integrating digital payments as part of their financial operations. Beyond providing convenience, these solutions serve as a gateway to efficient financial management, allowing businesses to streamline transactions securely. In this guide, we'll explore the world of digital payments in 2024, shedding light on trends, statistics, and tools tailored for your small business.
What are digital payments?
Digital payments refer to financial transactions that are conducted electronically using digital technology and online platforms. These transactions involve the transfer of money or the initiation of a financial exchange without the need for physical currency or traditional paper-based methods. Digital payments use computer networks, the internet, and electronic devices like smartphones, tablets, or computers to facilitate the transfer of funds. Examples of digital payment methods include mobile wallets, online banking transfers (like ACH), and credit/debit card transactions.
Digital payments vs. electronic payments
While all digital payments are electronic, not all electronic payments are necessarily digital. Electronic payments can include traditional methods, such as ACH and wires, that do not exclusively rely on digital technology, whereas digital payments specifically involve the use of digital tools and platforms.
The growth of digital payments
The global digital payment landscape has experienced substantial expansion, with transaction volumes exceeding $50 trillion in 2024. This growth highlights the growing dependence on digital payment solutions across various industries and geographic regions. Currently, over 50% of small businesses depend on digital platforms for their financial transactions. A noteworthy trend in the industry is the increasing adoption of contactless payment methods, accounting for more than 40% of all digital payments worldwide.
What you should know as a small business owner
Mobile wallet usage: Over 60% of small businesses use mobile wallets for transactions, reflecting a growing preference for on-the-go and secure payment options.
Average monthly digital spending: Small businesses conduct digital transactions averaging $15,000 per month, highlighting the significant role digital payments play in day-to-day operations.
Digital fraud prevention: With the rise of digital transactions, small businesses are investing in advanced cybersecurity measures, allocating an average of $5,000 annually for fraud prevention tools. This $5,000 may seem a lot for a start-up, but it could save you a fortune in the long run.
Benefits of digital payments for your small businesses
Digital payments can reduce transaction times, fostering more efficient business operations. The combination of efficiency and speed, along with enhanced security features such as encryption and tokenization, makes digital payments a safer option for both businesses and customers globally. Digital payments enable companies to build a broader, even global, reach. Lastly, the ease of digital record-keeping simplifies accounting processes and ensures accuracy, making digital payments essential for small businesses.
Unlocking the power of seamless digital payments with Expensify
Expensify provides a comprehensive digital solution for every aspect of your small business, ranging from seamless expense management to real-time transaction tracking. Now, you can set budgets, access virtual and physical cards like the Expensify Card, track expenses, monitor distance, send customer invoices, and accept digital payments. Check out all the ways you can empower your business with digital payments and more by starting your free trial with Expensify today
