Council Post: How Digital Payments Can Change Your Business

Peter Nesbitt is VP of Finance at Teampay, the top distributed spend management platform giving finance control and visibility into spend.

Digital everything has surged this past year. From consumer-driven trends to business operations, there has been a rise in virtual that is unlikely to go away after the pandemic. This includes remote work, virtual events, online media and — yes — digital payments.

The digital payments market is set to grow globally at 19.4% CAGR between 2021 and 2028, with companies like Apple, Venmo and Square leading the way. This is due in part to the high adoption rate of smartphones, rise in e-commerce sales and explosion in Internet activities across the globe.

Even banks are getting in on this trend. Research from the Bank for International Settlements found that 80% of surveyed central banks are engaged in some type of central bank digital currency initiative, including both corporate and individual use cases.

What Are Digital Payments?

Digital payments are transactions that occur through digital or online modes. This includes virtual cards, wire transfers, and digital wallets such as Apple Pay, Google Pay and Coinbase Wallet. Digital payments provide an automated, secure and auditable way of making transactions.

In the business world, digital payments mean that finance teams have access to accurate information and real-time visibility into company spend. They can see when and where money is spent as it happens and use that information to develop strategic insights that they can quickly act on.

Benefits Of Digital Payments

o Security. Digital payments have greater security. Card numbers are tied to individual purchases rather than the card itself, and each transaction is limited to the preapproved amount.

o Control. Instead of giving employees traditional physical cards, digital technology allows you to limit payment methods to specific, preapproved transactions.

o Visibility. By issuing separate card numbers for each purchase, finance teams have clearer audit trails and cleaner data. They can monitor purchase requests and track expenses in real time instead of waiting until the end of the month.

o Less manual work. Even finance teams that have adopted some software are often stuck manually faxing purchase orders, going through paper receipts or mailing checks — not to mention manually reconciling all of these paper activities into accounting systems. Digital payments technology reduces manual work by unifying the entire process into a single automated workflow and seamlessly passing the data through to the general ledger.

o Ease of use. With digital payments technology, employees can pay for purchases on the go using their mobile wallet, with the option to use a virtual or physical card if necessary.

How To Implement Digital Payments

Before you put digital technology into action, calculate the project’s ROI, such as how much time will be saved on manual processes or if the company will get any rebates. Articulating the clear benefit of digital payments will make it easier to get leadership on board.

Start by reviewing how your payments are made today, and look for opportunities to move them to digital payments. Although checks might be the default, most vendors will accept card payments if you ask.

The best way to avoid a bumpy rollout is to make sure any new digital payments system is easy for employees to use. When a new system requires training and utilization to yield benefits, the gains only happen if employees use it.

Approach All Purchasing With A Digital Mindset

On the surface, digital payments are just payments that happen digitally. But it’s about so much more than virtual credit cards and digital wallets.

Taking a digital approach doesn’t mean simply digitizing an existing process. It means providing an end-to-end connected experience that integrates the payment with the coding and receipt capture, whether employees make purchases online or in-person.

There is a strong potential to return to the office and even business travel in the upcoming months, and physical payments will once again become a necessity. But this doesn’t mean you should go back to spending money the way you did before. We’ve learned that the traditionally disparate steps in the purchasing process no longer make sense in today’s increasingly connected world.

Instead, take a holistic approach that provides a connected digital experience across all purchases. This will enable all employees to make purchases quickly and without friction, in compliance with the needs of modern finance teams.

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