Payment processing has always been a very important component of the overall business cycle. Regardless of the industry your business operates in and regardless of whether it is small or large, processing payments is a crucial part of, well, making sure you are actually getting paid.
Though payment processing is rarely the first thing a business owner thinks of when generating a new business plan, it is still something that is very important. Without sufficient infrastructure for allocating payments to where they need to be, your business will quickly begin experiencing financial, legal, and other potential types of problems.
By having the best payment processing systems in place, you can operate smoothly and continue moving closer to achieving its long-term goals. One of the best ways to ensure these systems are effective and efficient as they can possibly be is to choose a reliable payment processing partner.
While the outsourced payment processing industry is something that has been in place for years, this year has witnessed an exceptional level of growth. In this article, we will discuss 9 of the reasons this growth has occurred and can be expected to continue into the foreseeable future. By understanding the benefits of choosing to outsource this vital component of your business, you can decide if choosing to do so will be in your best interest.
1. Remote Payment Processing
Naturally, the events of 2020 have had a major impact on the ways that many companies do business. Rather than going into an office every day, many businesses have been forced to quickly adapt and develop various remote processes—payment processing has been no exception to this general trend. Instead of trying to develop new infrastructure from scratch, businesses around the world have found it much easier to switch to work with an experienced team and outsource all of their payment processing needs. Even once things return to normal, it is likely that many businesses will still choose to keep these new systems in place.
2. Reduced Costs
While the cost of processing a payment might not seem like a very big deal, these small expenses can quickly begin to accumulate. This is especially true for companies that rely on physically printing their checks—ink, envelops, stock paper, and other expenses can quickly begin to add up. Because an outsourced partner operates on a large scale and already has these systems in place, they can reduce marginal costs and pass the savings to their clients.
Outsourcing, in general, has not just been a noticeable trend in the payment processing industry but has been measurably increasing in pretty much every aspect of business operation. One of the reasons these changes have been so noticeable is that outsourcing is the easiest way to access specialized experts. Not only will working with someone with a vast knowledge of payment processing ensure your systems are as effective as they can possibly be; choosing to outsource will also enable you to divert your attention to the other components of running a business.
4. Transitional Check Issuing Systems
According to an article published in the Atlantic, there are 28 million paper checks written and processed every day. While this figure is actually significantly less than it was in years past, it is still clear that check issuing plays a very important role in the world of business. Currently, many businesses desire to implement a system that utilizes both paper and digital checking. Any business that desires this sort of hybrid or “transitional” checking structure will likely be much better off working with an outsourced expert.
5. Automatic Statement Generation
With an effective payment processing system in place, it will be much easier to know the status of each pending payment and, consequently, generate financial statements and reports that can potentially help your business. Rather than needing to dig through your books and create each of these reports by hand, your outsourced payment processing partner can help create the infrastructure needed to generate each of these statements automatically.
6. Increased Security
At first, a business might be hesitant to outsource any of its systems and processes that contain sensitive financial information. However, in reality, choosing to work with a qualified payment processing specialist is actually one of the easiest ways for a business to increase its current level of security. In addition to investing in a nearly foolproof digital security system, these partners can also offer benefits such as positive pay and special security features included in each of your physical checks. Whether your payments are physical or digital, you can rest knowing you are secure.
7. Legal Protection
The passage of HIPAA legislation in the 1990s helped ensure the sensitive medical information would remain secure and could only be accessed by pre-approved parties. If your business is involved in the medical industry, it is not just a good idea to make sure that you are HIPAA compliant—it is required by law. Additionally, outsourced payment processing companies can also offer added security to businesses in banking, finance, legal, and other industries that use personal financial information.
In both good times and in bad, it is quite possible that your business will need to suddenly change the scale of its operations (including payment processing). The recent health crisis has made this statement more relevant than ever. Fortunately, the best payment processing companies will make it easy to change your operations and scale up or scale down as needed.
9. Improved Decision-Making
In the world of business, a single decision can often have “snowballing” effects that will affect the well-being of your entire operation. In order to decide what is truly best for your company, you will need to have access to information that is current and reliable. By having a data-driven, smart payment processing system in place, you will be able to have a fuller understanding of your current cash flow situation and make the decisions that are truly in your best interest.
Payment processing is–and will remain–a very important part of running a business. Choosing to outsource your payment processing needs can provide a wide array of benefits. For each of the reasons mentioned above, the outsourced payment processing industry has been able to experience a truly exceptional level of growth.