Top 9 Benefits of Switching to Digital Receipts in 2024
Receipts are important for business and customers, since they act as proof of financial transactions.
The bad news: They have a nasty habit of getting lost or damaged, when you need them; or turning up in an old jeans pocket when you least expect it.
The good news: Digital Receipts!
Irrespective of the business size or type, digital receipts are transforming retail marketing, and it’s time for your business to jump on the bandwagon.
In this post, we’ll tell you why.
What are the benefits of using digital receipts?
You may already have a record of all the transactions on your point of sale or bookkeeping system. But here’s why we still recommend setting up digital receipts:
1. Saves money
There are more than 300 billion receipts printed each year. Apart from the environmental damage, businesses need to shell out thousands of dollars on thermal paper, ink cartridges, printers, and more.
Digital receipts are far less expensive and reduce overhead operating costs. All you need is a Payment Service Provider like PayBy to automate creating and sharing them.
2. Promotes sustainability
Since the figures are burned and not printed on the surface, paper receipts cannot be recycled. Moreover, the production and disposal of receipt paper emits the carbon equivalent of over 471,000 cars on the road.
In the early 2000s, before retail mobile apps and email marketing, only the Apple Store and a few startups pushed digital receipts as part of the growing sustainability movement. Today, the benefits of eco-friendly receipts are widely understood.
For example - A report by Green America showed how a single Walgreens-sized company could save over 55,000 trees, 58.8 million gallons of water, and 17.6 million pounds of CO2 emissions annually by ditching paper receipts.
3. Enhances customer satisfaction
Digital receipts also create an opportunity to follow up with customers and collect feedback on their experiences and purchases.
Knowing their purchase details (like product, offers available, etc.,) and the support salesperson can be instrumental while analyzing customer feedback. It helps you see how your business is doing in real-time; improving overall strategy and enhancing customer experience.
4. Facilitates hassle-free tax season
Paper receipts need to be hunted for, sorted and then organized during the tax season. This is both time consuming and prone to human errors while recording spends and expenses.
Digital receipts can be stored on the cloud, which is easily accessible during tax season. There is no risk of losing or throwing digital receipts away, so you won’t have to deal with books that don’t balance at the end of each month.
When you use a payments solution like PayBy, you can record all digital receipts by integrating it with the bookkeeping software or tax filing systems.
5. Eases post-purchase interaction
Customers prefer digital receipts because, unlike thermal paper receipts, they don’t fade or get lost. This helps in post purchase interactions like return, exchange, warranty or alteration.
For a business, digital receipts can act as proof to check the validity of requests being made and to tally transaction records.
6. Boosts customer engagement
Business owners should focus on consumer relationships that extend beyond transactional communications. With digital receipts, you get access to your customers’ contact information to create email and SMS lists. This can be useful for product launches, special offers, or educational content about the product/service.
You can also embed links to the website, social media handles and loyalty programs to create avenues to establish stronger relationships with your customers.
7. Creates upsell and cross-sell opportunities
76% of customers get frustrated without a personalized experience with a brand. With digital receipts, you have access to the data at the transaction level. This can help you recommend complimentary or similar products/ services to the purchase; and add discounts/offers to sweeten the deal.
With tailored content, you can drive higher repeat purchases and boost the overall CLTV, leading to greater business profits.
8. Improves customer retention
With customer acquisition costs increasing by the day, marketing efforts need to encompass customer retention. The data gathered through digital receipts can be used to identify top customers and their purchase behavior - including preferred products, purchase power, purchase frequency and more.
This can further help you segment and tailor the communication with customers, improving the retention rate.
9. Protects your employees and customers
Approximately 93% of paper receipts are coated with Bisphenol-A (BPA) or Bisphenol-S (BPS). They could lead to fetal development issues, type 2 diabetes, thyroid conditions, reproductive impairment, and other health concerns.
Unfortunately, employees who manage the point of sale have regular contact with receipts and have over 30% more BPA or BPS found in their bodies; putting them at risk. A shift to no-contact digital receipts protects both employees and frequent shoppers.
The benefits of digital receipts are countless, and is a reminder that we need to continue replacing outdated, wasteful processes, with innovative solutions.
Forward-thinking businesses must move towards paperless options - no matter what the industry.
With comprehensive payment solutions like PayBy, it is also easy for businesses to get started with digital receipts. From the online payment gateway to the point of sale systems and scan-to-pay QR codes, PayBy enables you to automate sending branded digital receipts to customers via email and SMS without switching tools.
Ready to track and record transactions more efficiently?
Cashless Payment Benefits Across Industries in 2024
The pervasive shift towards cashless payments is transforming the landscape of industries and businesses, irrespective of their size.
Global cashless payment volumes are poised to surge by over 80% from 2020 to 2025, with a nearly threefold increase anticipated by 2030.
In this blog post, we see the key industries we are noticing embracing cashless payments with PayBy.
Which industries need cashless payments
Numerous industries are adopting cashless payments, as digital transactions offer increased efficiency, convenience, and security. Here are some that are particularly benefiting from the shift:
1. Information technology and services
In the Information Technology and Services sector, where digital transactions are commonplace, the integration of cashless payments aligns seamlessly with the nature of operations. The elimination of currency-related barriers and diverse banking systems through cashless payments streamlines exchanges, simplifying the overall transactional process.
The adoption of digital payments brings about advantages in auditing, accounting, and financial reporting. It ensures compliance with regulatory standards while concurrently reducing manual errors in bookkeeping processes. The streamlined nature of cashless transactions accelerates payment processing, contributing to the expeditious flow of cash for businesses.
IT and Services is one of those industries that are tech-savvy and can swiftly embrace new technologies and payment platforms. This adaptability enhances their competitiveness in the market, providing added value to clients through the facilitation of seamless financial transactions.
2. Tourism and hotels
In Tourism and Hotels, the integration of cashless payments significantly simplifies transactions for both travelers and businesses involved in travel bookings, hotel stays, and related activities.
Tourists benefit from the seamless ability to book accommodations, make reservations, and settle bills through digital payment methods, eliminating the inconveniences associated with currency exchange and physical cash handling.
The adoption of digital payment systems in the tourism and hotel industry enables the collection of valuable data on guest preferences and spending patterns. This data becomes instrumental for hotels in personalizing services, offering targeted promotions, and creating effective loyalty programs.
The availability of diverse digital payment options further contributes to customer trust and loyalty, providing guests with peace of mind and convenience throughout their stays.
3. Fitness and wellness
Cashless payments simplify the entire financial landscape for both businesses and clients in the fitness and wellness industry.
For gyms, wellness centers, and fitness classes, the adoption of cashless payments streamlines membership transactions, enabling members to effortlessly pay for subscriptions or sessions using digital methods. This ensures a consistent and secure revenue stream for businesses.
The elimination of the need for clients to carry cash or checks to fitness facilities is a significant advantage of digital payments in this context.
Integrated digital payment systems also generate valuable data insights on client behaviors and preferences. Leveraging this data, fitness and wellness centers can tailor their services, offering personalized fitness plans and launching targeted marketing campaigns to drive business growth.
Such cashless payments industries open avenues for implementing loyalty programs and flexible payment options, enhancing client loyalty and encouraging regular return visits for services or memberships.
4. Social product and service sellers
Digital payment methods play a crucial role in breaking down geographical barriers for social product & services sellers. They empower creators to engage with customers worldwide, eliminating the constraints associated with physical cash and local currencies.
Buyers, in turn, benefit from the ease with which they can purchase digital content, artwork, or services with just a few clicks. This accessibility not only encourages impulse buying but also eliminates the inconveniences often associated with traditional payment methods.
This electronic payments industry also offers robust encryption and fraud protection protocols. These security measures safeguard both the seller's income and the buyer's financial information, fostering a sense of trust between the parties involved.
5. Restaurants and cafes
In restaurants & cafes, minimizing cash handling emerges as a crucial aspect, mitigating the risks associated with errors in change and the potential for theft. This not only creates a more secure environment for both employees and patrons but also streamlines the financial processes within the establishment.
Establishments leveraging cashless payments often adopt innovative technologies, such as table-side ordering through apps, self-checkout kiosks, and loyalty programs linked to digital wallets. This not only fosters a more tech-savvy and competitive edge but also reflects a commitment to meeting the evolving expectations of customers.
Offering various cashless payment methods caters to diverse customer preferences, incorporating contactless payments, mobile wallets, and online ordering systems that align with modern consumer behaviors and further streamline the dining experience.
6. Hospital and healthcare
Integrated payment systems within hospitals & healthcare settings extend their impact by facilitating seamless integration with electronic health records (EHRs) and insurance platforms. This integration, in turn, streamlines claims processing and ensures the accurate documentation of financial transactions. Moreover, cashless payments serve as a fundamental enabler for telehealth services, allowing patients to conveniently pay for virtual consultations or remote monitoring services.
7. Gaming, betting and casinos
Players now have the convenience of seamlessly loading funds into their gaming or betting platforms through various digital payment methods, eliminating the need for handling physical cash and providing speed in placing bets or playing games.
Beyond security, cashless payments enable better control and management of funds, allowing players to monitor their spending, set limits, and track gaming expenses more effectively through digital payment systems, promoting responsible gambling practices.
The advantages extend to swift and secure payouts for winnings, as players receive their earnings directly into their digital wallets or bank accounts. This eliminates the delays and complexities associated with traditional cash payouts.
Digital payment systems bring efficiency to the claims process for both insurance providers and policyholders. Claims can be filed and settled digitally, reducing paperwork, minimizing processing times, and facilitating faster disbursement of claim amounts.
Also, digital platforms empower policyholders to easily access their policy details, make necessary changes, and communicate seamlessly with insurers, enhancing overall transparency and responsiveness in the insurance relationship.
Beyond convenience and efficiency, digital transactions in this industry ensures robust security measures against fraud and unauthorized access.
Insurance companies can implement advanced technologies such as multi-factor authentication and encryption protocols to safeguard policyholder data, thus preventing fraudulent activities and enhancing the overall security of the insurance ecosystem.
How can PayBy help?
PayBy offers a comprehensive suite of cashless payment solutions that can be tailored to meet the industry's diverse and complex transaction requirements.
PayBy payment solutions offer features such as:
- Multiple payment modes (Credit cards, Debit Cards, Digital wallets & Bank Transfers)
- Custom payment options (Subscription-based payments, One-time payments & Optimized payment experience)
- Transaction monitoring and management (Payment tracking dashboard, Digital receipts, Detailed reports and insights & Record seasonal fluctuations)
- User permissions and control
- Automated payouts (Monitor payout status, No delay in bulk processing)
- Security and Compliance
In this digitally woke era, the demand for streamlined cashless payment solutions reigns supreme. When it comes to selecting an ideal payment system for your industry, it should offer easy setup, seamless integration with existing tools, and robust transaction tracking capabilities.
PayBy transforms digital payments by offering real-time insights, secure transactions, streamlined reconciliation, and integration capabilities.
With no setup fees and one of the lowest transaction charges in the industry, the PayBy payment gateway also gives you more control over your finances.
Embrace the cashless system advantages—get started with PayBy today.
1. What are the benefits of a cashless economy?
A cashless economy offers heightened efficiency, transparency, and convenience in financial transactions, fostering economic growth. The cashless payments industries witnesses increased speed, reduced costs, and improved record-keeping, streamlining financial interactions for businesses and individuals alike.
2. Why is cashless payment safer?
Cashless payments industries enhance safety by minimizing the risk of theft and fraud. Digital transactions offer secure encryption, authentication protocols, and real-time monitoring, ensuring a protected financial ecosystem with reduced physical vulnerability compared to traditional cash transactions.
3. What is an example of a cashless transaction?
A typical example of a cashless transaction is using mobile payment apps to pay for goods and services, exemplifying the growing influence of cashless payments industries in modern economies.
How does PayBy POS Help with Cash Management
Efficient cash management stands as a cornerstone for sustainable growth and financial stability.
However, there are several challenges that businesses face in cash management, such as:
- Handling physical cash poses security risks
- Manual cash reconciliation can be time-consuming and error-prone
- Lack of real-time visibility into cash flows complicates decision-making
- Difficulty in tracking and managing multiple payment methods efficiently
Enter POS systems, a solution addressing these hurdles.
POS systems combine hardware and software to facilitate sales, manage inventory, process payments, and generate transaction records for businesses' operational and financial management.
In this blog post, learn how the PayBy POS system emerges as a game-changer as it offers a comprehensive solution that simplifies and optimizes cash management processes.
Overview of PayBy POS System
PayBy POS system is a complete solution designed to streamline in-store cashless transactions, catering to various business sizes and needs. Its key features and functionalities span across three primary products:
1. Smart POS
Ideal for small to large merchants, it facilitates cashless payments, supports multiple modes of payment (including AliPay+, PayBy, and Botim wallets), and offers features like transaction tracking, multi-store management, advanced permission controls, and AI-enabled security.
2. Smart BOX
Tailored for SMEs, this portable solution seamlessly integrates with existing terminals, allowing QR code scanning via the PayBy consumer app for swift payments. It also boasts a robust security infrastructure.
3. QR code payments
A free POS solution designed for small businesses, enabling cashless payments without a physical device. Merchants can display a QR code for customers to scan and make payments using various methods like credit cards, debit cards, and multiple wallets.
Other features of PayBy
PayBy offers an array of features to set up cashless payments and accept all modes of payment across physical customer touchpoints. Here are some other PayBy POS features that make it a standout choice for businesses:
Efficient Transaction Processing
- Explain how PayBy POS streamlines transaction processing, reducing errors and wait times.
- Highlight features like quick barcode scanning and easy payment processing.
Enhanced Security and Reduced Cash Handling Errors
- Discuss the security features of PayBy POS, including secure payment processing and fraud prevention.
- Explain how reduced cash handling minimizes errors and potential theft.
Simplifying Reconciliation and End-of-Day Reporting
- Describe how PayBy POS simplifies the reconciliation process with accurate end-of-day reports.
- Highlight the ease of matching sales data with bank deposits.
Integration with Accounting Software
- Discuss how PayBy POS can integrate with accounting software for streamlined financial management.
- Explain the benefits of this integration for maintaining accurate financial records.
1. Real-time tracking and reporting
Payby’s POS reporting tools provide real-time tracking of sales and transactions through a centralized dashboard, offering businesses immediate access to transaction data across various payment modes, including QR codes and other PayBy-supported methods. Here's a breakdown of how it achieves real-time transaction tracking:
- Centralized dashboard: Merchants can access this dashboard to view and monitor transactions as they occur. It captures payments made through QR codes and other supported payment modes, allowing for a comprehensive overview of all sales activities.
- Instant transaction updates: As transactions take place, the system updates the dashboard in real-time. This instantaneous reporting ensures that businesses have up-to-the-minute information on sales, revenue, and payment types, eliminating delays in accessing crucial financial data.
- Comprehensive transaction details: The dashboard provides detailed transaction information, including transaction amounts, payment methods used, timestamps, and customer details where applicable. This level of granularity allows for thorough tracking and analysis of sales activities.
With access to such real-time data, businesses can make informed decisions promptly. Whether it's adjusting inventory levels, optimizing marketing strategies, or identifying high-performing products or services, real-time tracking facilitates agile decision-making.
2. Efficient transaction processing
PayBy POS system streamlines transaction processing by incorporating efficient features that minimize errors and wait times, ultimately enhancing the overall payment experience. Here's how it achieves this:
- Quick barcode scanning: The system facilitates swift payment processing through QR code scanning and reduces transaction times significantly. Quick QR scanning and easy payment processing mean shorter queues and faster checkout experiences for customers. This not only enhances customer satisfaction but also optimizes business operations by increasing transaction throughput.
It also allows merchants to create unlimited QR codes without incurring additional costs. This feature allows seamless payment collection across different locations or touchpoints, enabling customers to make payments swiftly by scanning the code using their smartphones.
- Easy payment processing: PayBy POS offers a user-friendly payment processing interface. Customers can choose from various payment modes supported by PayBy, including credit cards, debit cards, and multiple wallets. The interface is designed to be intuitive, ensuring a smooth payment experience for customers, reducing the likelihood of errors during the transaction process.
- Customize payment collection: The ability to create unlimited QR codes allows businesses to have specific codes for different locations or products/services. This customized approach to payment collection simplifies accounting and reconciliation processes as transactions are recorded against specific codes, aiding in tracking sales by location or items.
3. Enhanced security and reduced cash-handling errors
PayBy POS prioritizes security, implementing robust measures to ensure secure payment processing and prevent fraud. Here's an overview of its security features:
- Secure payment processing: PayBy integrates with various payment modes, offering in-app payment solutions with optimized mobile pay pages and secure transaction interfaces. This integration ensures that transactions are conducted through a secure environment, protecting sensitive payment information from unauthorized access or interception.
- Security password controls: PayBy implements security password control solutions provided by CFCA (China Financial Certification Authority) or similar reputable entities. These controls add an extra layer of security, ensuring that only authorized personnel can access sensitive system functionalities or perform specific actions, reducing the risk of internal breaches.
- State-of-the-Art QR code encryption: PayBy utilizes state-of-the-art encryption techniques to secure scan-to-pay QR codes. This encryption ensures that QR codes used for transactions are tamper-resistant and cannot be duplicated or manipulated, thereby preventing fraudulent activities related to QR code payments.
4. Simplifying reconciliation and end-of-day reporting
PayBy POS streamlines the reconciliation process by offering accurate end-of-day reports and facilitating the matching of sales data with bank deposits. Here's how it simplifies these aspects:
- Comprehensive end-of-day reports: The system generates detailed end-of-day reports that provide a comprehensive overview of all transactions processed during the day. These reports include sales data, payment methods used, transaction amounts, taxes, discounts, and other pertinent details. The accuracy and comprehensiveness of these reports aid in reconciling sales activities against bank deposits.
- Real-time account receivables tracking: PayBy POS offers a real-time dashboard that tracks account receivables against invoices shared and paid. This dashboard provides immediate insights into the status of payments, allowing businesses to monitor outstanding invoices and payments received. This feature simplifies the reconciliation process by keeping track of pending payments and ensuring all transactions are accounted for.
- Detailed invoices: Invoices generated by PayBy POS offer a detailed breakdown of expenses, including prices, taxes, discounts, and other relevant information. This level of detail ensures transparency in billing, enabling customers to understand their charges thoroughly. This detailed invoice breakdown makes it easier to match sales data with corresponding customer payments.
The system's analytics capabilities allow businesses to identify inactive customers, enabling targeted efforts to re-engage with them. Also, by detecting payment failures and addressing them swiftly, businesses can reduce customer churn and maintain a healthier customer base.
5. Integration with accounting software
PayBy POS offers seamless integration with accounting software through its easy-to-use API and robust compatibility with various CMS (Content Management System) platforms. Here's how this integration benefits businesses in maintaining accurate financial records:
- Efficient data transfer: The integration allows for smooth and automatic transfer of transaction data from PayBy POS to accounting software. This eliminates the need for manual entry, reducing the risk of human errors and ensuring data accuracy.
- Real-time updates: The integration enables real-time updates between the POS systems and accounting software. This means that as transactions occur, they are promptly reflected in the accounting records. Real-time synchronization ensures that financial data is always up-to-date and reflects the latest sales and payment information.
- Streamlined reconciliation: Integrating PayBy POS with accounting software simplifies the reconciliation process. Matching sales data with bank deposits becomes more straightforward, as all transaction details, including payment methods, amounts, and taxes, seamlessly flow into the accounting system. This streamlines the reconciliation of sales records with financial statements.
- Enhanced financial visibility: The integration provides a holistic view of financial data. Business owners and accountants gain comprehensive insights into sales, revenue, expenses, and other financial metrics within the accounting software. This comprehensive view allows for better financial analysis and decision-making.
Selecting one of the optimal POS systems is pivotal. The POS system provided by PayBy transforms cash management by offering real-time insights, secure transactions, streamlined reconciliation, and integration capabilities.
With no setup fees and one of the lowest transaction charges in the industry, the PayBy payment gateway also gives you more control over your finances.
Embrace the future of cash management—get started with PayBy POS today.
1. What are the 4 types of POS?
POS systems come in four primary types: mobile POS, cloud-based POS, terminal POS, and self-service kiosk POS. Each type caters to different business needs, offering flexibility, mobility, and varied functionalities to streamline transactions and enhance overall operational efficiency.
2. Why is the POS system used?
POS systems are integral for businesses to manage sales, inventory, and customer interactions effectively. They automate transactions, simplify inventory tracking, provide insights into sales trends, enhance customer experiences, and offer secure payment processing, ensuring smooth operations and informed decision-making for sustained growth.
3. What are the 6 functions of the POS?
POS systems encompass pivotal functions including transaction processing, inventory management, sales reporting, customer data tracking, employee management, and integration capabilities with other business software. These functions collectively optimize business operations.
7 Reasons you Should Introduce Cashless Payment Systems
Cash is no longer king.
30 years ago, a world without cash was not possible. But, over the years, businesses have realized that dependency on cash can be tricky and risky.
From not being able to record every transaction to theft/fraud or even providing change to the customer, businesses need better solutions. Whether you are a small, mid or enterprise based business, cashless payment systems are the future to improve business efficiency.
In this post, we look into the leading reasons why businesses of scale can be seen adopting cashless payment systems.
What are Cashless Payment Systems?
Payment transactions that occur without physical exchange of money are referred to as cashless payments.
They can be conducted online and in-stores via a point of sale (POS). Both, the payer and the receiver, use digital mediums to exchange money. This includes payments via direct bank transfers, credit/ debit cards, digital wallets, online payment portals and similar transaction modes.
Why should businesses switch to cashless payment systems?
Cashless payments have widened the opportunities for businesses to enhance the customer experience offered and take control of their finances. Here are some of the leading reasons why businesses have been quick to embrace this change:
1. Helps increase sales and revenue
‘Swipe, Tap or Scan’ has become extremely common as we move towards a cashless society. Customers prefer to carry their phone or credit/debit cards rather than the cumbersome wallet filled with cash.
Businesses that only accept cash, inadvertently limit sales. Numerous and frictionless payment methods allow people to spend easily. When paying digitalls, customers tend to spend more, leading to higher revenue.
2. Helps increases convenience and saves time
Cashless payment systems save time. They can be 6x faster when compared to cash transactions, reducing the average transaction time from 90 seconds, to just 15 seconds.
Shorter lines encourage people to buy that extra drink or shirt, resulting in a positive customer experience and retention. When Atlanta’s Mercedes-Benz Stadium went cashfree, there was a combined 16% increase in food and beverage spending at Atlanta Falcons and Atlanta United games.
This leads to improved revenue and higher customer lifetime value amongst customers.
For business owners, in-store cashless payments allow tracking of incoming and outgoing funds. This saves time and comes handy while filing returns.
3. Helps analyze data and generate insights
With cashless payment systems, you can gain insights into your business, to make informed decisions about evolving needs and preferences.
All transactions can be used to segment your customers, based on payment volume or payment type in specific periods.
Data helps understand your customers preference and behavior patterns. This knowledge leads to targeted product launches, offers and overall customer satisfaction.
4. Helps with increased security during transactions
Cybersecurity in cashless payments, has taken off one more worry off the consumer and retailer. Cashless payment solutions help eliminate the risk of theft or fraud. Here’s how:
- Digital transactions are secured with varying levels of encryption and data authentication
- With most payment modes, enabling two-factor authentication (TFA) adds an extra layer of security
- Customers can activate geo-blocking features that restrict transactions in certain countries to prevent fraud
- All data collected from digital transactions is protected against use by third parties. No personal information can be disclosed without permission
- All digital transaction methods provide SMS and email notifications; and statements for users to track their funds
5. Helps to lower operating expenses
Cash management is neither easy nor cheap.
Storing, transporting and depositing cash funds is a task by itself. Moreover, you need additional training for employees to manage cash payments — and you cannot discount the scope of human error. Building additional security to keep your funds safe like lockers, cameras, sometimes even armored trucks (when transporting huge amounts of money) is an expensive affair.
SMBs can cut unnecessary expenses with digital payment solutions. Bill Walsh, VP of Tampa Bay Rays, said “We’ve seen some pretty substantial operational savings from not having to manage a large footprint of cash in the building. The team saved $150,000 in operating and manpower costs.”
6. Helps to enhance accounting accuracy and efficiency
Digital payments can increase transparency and streamline management. Digital transactions make accounting accurate and faster; as compared to manual efforts.
For retailers, there is a clear paper trail, and no risk of vendors/employees under-reporting sales. Payments made by customers or to vendors can be easily tracked without sifting through physical records.
Cashless payment systems can reduce the time spent on accounting and reconciling at the end of the sales day, which allows you to focus on other aspects of the business.
7. Improved customer experience for customers
Based on the study by Visa, cashless payments, mainly via e-wallets (52%) and contactless card payments (44%), are growing rapidly. Customers prefer new payment methods such as Buy Now Pay Later (BNPL) solutions (63%).
This is particularly evident in categories such as bill payments, supermarkets, retail shopping, purchases at convenience stores, and restaurants.
Plus digital payment adoption offers benefits to consumers. These can be in the form of cashback, points, or vouchers. On the other hand, cash payments offer no such additional value, hence customers prefer making purchases via digital means.
By enabling cashless payment systems, you improve the customer experience and the value gained from your business. This encourages shoppers to buy and stay with your brand rather than the competition.
The benefits of cashless transactions cannot be ignored. It has changed the way people conduct business around the world. From malls to restaurants and eCommerce stores, most businesses have opted for the smarter and efficient method of digital payment systems.
The plus point is that it is not difficult to establish cashless payment solutions.
With comprehensive payment solutions like PayBy, it is also easy for businesses to get started with cashless payment systems. From the smart point of sale systems and scan-to-pay QR codes or online gateways; all solutions are designed for businesses of different sizes with different needs, to grow and succeed.
Cybersecurity in Digital Payments
According to JP Morgan, 30% of companies have reported an increase in digital payment frauds.
With the internet, businesses have revolutionized the way they collect customer payments. But not far behind are hackers/ miscreants who have made the internet an unsafe place, with increasing fraud and security breaches.
In this post, we look into why cybersecurity is important for businesses setting up online payments and the best practices we recommend following.
Why is cybersecurity important for online payments?
Whether you’re a business or a consumer, keeping your data secure is crucial. But here’s why cybersecurity measures in online payments are even more important:
1. To protect sensitive information
A typical financial services employee has access to 11 million files. Unfortunately, online transactions are susceptible to hackers. They are highly motivated by money to acquire data, especially personal banking information. Vulnerable systems are at high risk, which can lead to disastrous consequences for businesses and individuals. To protect sensitive data, cybersecurity in digital payments become crucial.
2. To prevent fraud
Money laundering, identity theft, and fraud are common concerns in online transactions. With machine learning and fraud detection mechanisms, cybersecurity programs can analyse transaction patterns for suspicious activity. This helps prevent theft/fraud in real-time.
3. To prevent hefty fines and legal repercussions
With online transactions, customers trust businesses to keep their data (card/bank details) safe. All merchants need to comply with payment industry requirements, such as PCI DSS, to ensure customer protection. If your business operates in the European Union, you have to comply with PSD2 Strong Customer Authentication (SCA). Multi-factor authentication helps reduce theft or fraud. As a business, if you fail to comply with these legal requirements, it could put you at risk of:
- Compensating victims for damages, if necessary
- Expenses related to litigation
- Hefty fines by governing authorities
4. Reduce chargebacks
Most chargebacks occur when a cardholder disputes a charge/ transaction on their account. They may not recognize the charge and believe it to be fraudulent, hence demand a refund from their bank. This is especially common in online transactions.
Secure payment gateways can help reduce fraudulent chargebacks by verifying the identity of the cardholder, saving you from financial losses and chargeback fees.
5. Positioning as a global business
There is the lack of uniformity in cross-border regulations. Different countries have different legal frameworks and security standards or regulations; that need to be catered to. By implementing secure payment gateways, compliant with multiple countries, businesses can have a worldwide target audience.
6. Protect your reputation
When Uber was hit by a data breach in 2016, the customer perception dropped by 141%. Data breaches lead to customer distrust and negative publicity. Brand reputation reigns supreme for all business. Enterprise organizations sometimes spend millions of dollars to build their brand image. If one single data breach could put all that effort down the drain, you begin to see the importance of cybersecurity for all payment infrastructure.
What are the best practices for securing online transactions?
Here are some of the best practices we recommend to brands setting up cashless payment modes:
1. Understand your PCI compliance requirements
In 2004, four major credit-card providers — American Express, Visa, MasterCard, and Discover, created The PCI Security Standards Council. Today, the PCI-DSS standard is a set of policies that govern how sensitive cardholder information should be handled
In the simplest of terms, no business must be able to see or access the customers’ card data. For this certain things need to be in place including:
- Data encryption during transmission
- Restrictions on access to information
- Robust firewalls and updated software and spyware.
- Prevent default credentials and allow customers to change credentials easily.
2. Data encryption with SSL and TLS protocols
Any online transaction requires the customer to share credit/debit card numbers, expiration dates, and CVV. Without proper data encryption, this data could easily be hacked.
Data encryption protocols including TLS (Transport Layer Security) and SSL (Secure Sockets Layer) can be used to encrypt data. TLS is a cryptographic security protocol that emerged from SSL, but can be considered as an upgrade for data privacy, security and authentication.
All SSL-certified websites have “https://” or a padlock icon which denotes a secure e-payment system. With the TLS encryption in place, the sensitive information is only transferred to the intended recipient. By authenticating the server, it prevents attackers from getting access to the data.
3. Implement 3D Secure 2
3D Secure 2 (3DS2) is used to authenticate online transactions by verifying a customer’s identity. It serves as an additional layer of authentication to make sure that a legitimate cardholder is conducting a transaction.
Here, the cardholder needs a one-time password, or fingerprint or facial recognition. This helps to prevent fraud and unauthorized transactions.
While it creates extra steps during the checkout process, for the first time — subsequent transactions at the same merchant do not require extra authentication (if approved by the card holder)
Additionally, 3DS2 prevents false declines by providing detailed data about the transaction. This helps both businesses and customers, preventing costly mistakes.
4. Deploy multi- or two-factor authentication
Multi-factor authentication (MFA) and two-factor authentication (2FA) are customer-facing authentication processes to verify the identity of users before processing payments. This is divided into two levels of authentication:
- What the user knows - Net banking or card details
- What the user has - OTP, PIN or CVV.
Multi Factor Authentication requires three or more different authentication factors in order to authorize a payment. Apart from the two, the third authentication step could be something they are (biometric data). For example in a password, a one-time code generated by an app and a fingerprint scan.
The more factors used makes it much harder for any miscreant to access an account, even with access to the user's password.
5. Ask for Card Verification Value (CVV)
Card Verification Value (CVV) is a three/four digit code on the back of credit cards. It helps verify the identity of a card holder during online transactions.
In a data breach, the CVV is unlikely to be stolen since it is not embossed or stored on the magnetic stripe or chip of the card.
6. Incorporate payment tokenization
Tokenization replaces the 16-digit card number with a digital identifier known as a ‘token’. It helps to protect the original data, while letting payment gateways initiate secure payment.
Payment tokenization helps in:
- Protecting sensitive payment information from being intercepted or stolen during a data breach.
- Helps businesses comply with regulations and legal standards, like PCI DSS and the General Data Protection Regulation (GDPR).
- Customers don’t need to repeatedly enter payment information for recurring payments or subscriptions, which improves the customer experience and lowers abandonment rates.
7. Maintain security of the website
To ensure customer safety, businesses need to keep the website, content management system (CMS), and online payments secure. Here’s how:
- Regularly update your website, CMS software and plugins or extensions, to patch security vulnerabilities
- Only accept strong passwords from the customers with certain pre qualifications like capital letters, special characters, numbers etc.
- Use a firewall to prevent unauthorized access and to block any suspicious traffic. Deploy monitoring and fraud detection tools to detect and respond to suspicious activity on your website.
8. Train your employees
Take appropriate steps to train employees about potential threats and steps for action. Set up sessions on data protection guidelines, multiple security measures and protocols, phishing and more. Make sure your employees understand the importance of online payment security through audits; and encourage immediate reporting of any suspicious activities.
9. Inform your customers
Make an effort to promote the data protection procedures to your customers. It is not only about providing features, but ensuring that your customers know and implement on their end; to truly make the whole process secure.
Cybersecurity is a growing concern for all businesses. Hence it is important to choose an end-to-end payment solution built with features and compliances built for high security.
PayBy digital payment solutions come with robust fraud detection and prevention mechanisms integrated into the systems. The solutions leverage AI-based fraud monitoring, 3D secure authentication and transaction risk analysis to ensure your approval rates are not impacted by cyber threats.
Want to know more? Book a demo of PayBy today.