In this digital age, technology is no longer a luxury but a necessity to survive. Adapting business systems to the current digital landscape provides a better potential for your business to align with the latest customer behavior.
However, small and growing businesses are still reluctant to connect to a payment gateway system, which leads to unnecessary hidden costs. These costs aren’t always directly visible to business owners, but if you look closely, this can cause compounded costs with a bigger impact. Here are some of the hidden costs that might occur by not using a payment gateway service.
What Is a Payment Gateway?
It is essential to understand the service that we want to talk about, so here’s a brief explanation you need to understand. A payment gateway is a payment service that connects your website business to various channels to accept payment directly from your website.
The customers can choose their preferred payment channel to complete their order. After that, the customers will be notified if the transaction is carried out successfully. Business owners can manage all of the transaction data in real-time through an integrated dashboard.
Payment gateway service streamlines the complicated flow of integrating your business with various bank partners. Business owner can provide a lot of payment channels for their customers in one effective integration.
The Hidden Cost of Not Using a Payment Gateway
Now that we understand the basics of payment gateway service, let’s break down the hidden costs you might incur by not using this payment service.
1. Higher Processing Fees
Besides connecting to a payment gateway service, business owners can also connect their businesses to bank partners manually, one by one, to accept specific payment channels from the banks.
After the customers have successfully paid their invoices, the money will be sent to the business’s bank account. This process is called the settlement process. If the bank account is different from the bank partner, the business may be charged settlement fees.
Payment Gateway service can provide a settlement services without additional fees.
2. Limited Market Reach
Providing only a bank transfer option for customers can cause limitations for your customers to pay for their orders. For instance, the customers who prefer using a credit card may cancel their order if they can’t pay using their credit card. This also applies to other payment methods like debit card, virtual account, QR payment, and more.
Those potential sales are gone, which hinders your business growth. You can reach wider potential customers by connecting your business to various payment channel options to adapt to the latest customer payment behaviour to boost your business growth.
Also read: What Is a Payment Link? An Advanced Technology for Transaction Journey
3. Human Error Risk
Manual payment processing requires more human manual input to manage transaction data. Managing data from various payment channels and across different periods becomes increasingly complicated without automation technology.
Those conditions also made it complicated to track data, especially from the older period. Human error becomes more prone because the process relies heavily on manual data entry and processing. Bigger losses and costs may occur due to the wrong data transaction.
4. Time-Consuming Transaction
A complicated process affects how long the transaction is carried out. For instance, it is taking time for the business owners to send the bank account number to customers, then the customers write down and pay via transfer, then they have to send the transfer receipt to the business.
After that, the business has to check the bank account statement to verify the payment. Then, creating a receipt manually for the customers is part of the transaction document. This time-consuming process creates a larger number of staff to handle daily transactions with customers, which is more costly for the business’s finances.
5. Difficulties in Scaling Up a Business
Limited market and time-consuming transaction process are the obstacles for the business to grow. Scaling up a business requires a more effective system to make sure the transactions are carried out successfully.
If the manual system doesn’t have the capability to accept and reconcile the transactions, the customers may complain and run away from the next repeat order. Instead of growing the business, it can lead to poor customer experience and trust, which requires a bigger cost to recover the reputation of your business.
You don’t have to connect right away; we are open for further discussion instead. Get to know more about your business transaction needs with our professional team. iFortepay is ready to assist you. Click here to contact us.
