The ability to effectively sell a business’s products or services is one of the most important aspects of running a company. After all, a business will not run if products do not sell. But what about the actual transaction between a company and the consumer? It needs to be a seamless experience for the customer, and the business must ensure that they collect their money. With the use of electronic payments on the rise, an effective payment processing system has never been more important. Let’s take a look at how payment processing affects the economy.
What is Payment Processing?
Payment processing is an important part of every transaction between a business and its consumers. It refers to the way in which payments are handled between the company and the consumer. For instance, let’s say a customer pays for their purchase using a credit card. The way in which the credit card is processed is considered to be payment processing. Payment processors subsequently facilitate the transfer of funds, which ensures businesses are paid in a timely manner. Having an effective payment processing system is crucial for successful transactions, customer satisfaction, fraud prevention and a business’s reputation.
How Do Electronic Payments Benefit Businesses?
The shift from cash payments to electronic forms of payment revolutionized the way we conduct business. Electronic forms of payment allow businesses to have more security than any other form of payment.
However, electronic forms of payment utilize a third-party processor which either confirms or denies the transaction in real-time and transfers funds instantaneously. An example of this is when a customer uses a credit or debit card with insufficient funds. Chances are, the processor denied the transaction. This is because it automatically detected a lack of the necessary funds. This is a form of elevated security for businesses and leads to a decrease in fraud, scams and the timely task of waiting on payments that may never come. Any business that accepts electronic forms of payments should be utilizing a payment processing system for the benefit of both the business and their customers.
What Does Payment Processing Mean for the Economy?
It may seem as if the effects of payment processing are only limited to consumers and businesses, but the bottom line is that payment processing affects the economy as a whole.
Increase in the Number of Sales
Transaction processing makes it easier for consumers to purchase goods and services either online or in brick-and-mortar locations. This leads to an increase in spending on goods and services, which is both good for businesses and a boost to the economy.
Increase in the Number of Jobs
When consumers increase spending, more jobs are subsequently created. An increase in spending leads to an increase in the purchase of goods. This means that the number of goods produced must be increased which requires more manpower, thus increasing the number of jobs needed to fulfill the product capacity. In many cases, companies that are more prosperous offer higher wages and benefits. There is a trickle-down effect.
Let the Numbers Speak for Themselves
According to Moody’s Analytics, over a five year period, electronic payments added $296 billion to Gross Domestic Product (GDP), which is the equivalent of creating an astounding 2.6 million jobs each year! This is greatly beneficial to any economy.
A Payment Processing System that Works for Your Business
VeriCheck is a premier payment processor that offers fast, secure and reliable transaction processing solutions. Whether your business is big or small, our specialists can set up a system to meet your needs and make sure transactions between your business and customers are seamless. Contact us today and let us help you take the hassle out of payment processing.