Pros and Cons of an Electronic Payment System

During this highly technological age, cash is trying hard to compete with electronic money, since nowadays a lot of people choose to use their virtual wallets. Here, you will read about the pros and cons of using an electronic payment system.

It is plain to see that electronic payment systems have more advantages than traditional banking services. Let’s see:

  • Saves on time

Money transfer from one virtual account to another may only take a few minutes, whereas a wire or postal transfer may take a number of days. Besides, you have to spend some time to go to the bank or post office and wait in line.

  • Controls expenses

Even if a person is willing to control his disbursements, it can take a lot of patience to jot down all the expenses, and this takes up a huge part of the total amount. On the other hand, the virtual account comprises the history of all the transactions, including the store name and amount spent. Best of all, you can check it whenever and wherever you like. In this case, an electronic payment system works to your advantage.

  • Reduced loss and theft risks

You will not make the mistake of losing or leaving your virtual wallet behind, and it can never be taken by robbers.

  • User- friendly

All services aim to reach out to a greater number of audiences and so, their interface should be easy for users to understand. Moreover, users can always ask help from the support team since they work 24/7. You can receive an answer by means of the forums as well.

  • Convenient to use

As long as you have access to the Internet, you can carry out transfers anytime, anywhere.

After discussing the advantages that come with using an electronic payment system, it is essential to talk about its disadvantages as well:

  • Restrictions

In every payment system, there is a limit with regard to the number of transactions you can do per day and the maximum amount you can withdraw.

  • Risk of Getting Hacked

Risks can be reduced when you follow the security regulations. This is comparable to the risk of being robbed. The situation can get worse when the processing company’s system breaks down, since this may lead to the leaking of confidential information on the online cards, as well as its owners. Though some electronic payment systems do not launch plastic cards, they can however be involved in Identity theft scandals.

  • The problem of money transfer from one payment system to another

Most of the time, electronic payment systems do not cooperate with one another. If that is the case, you can use e-currency exchange services. However, it can consume a lot of time when you do not have a service you can trust for this purpose.

  • Lack of Anonymity

Since the database of the payment system stores all your transactions – like the name of recipient, amount and time – the intelligence agency can access all your information. Decide on whether that is good or bad.

  • The Need for Internet Access

When you have no Internet connection, you cannot transact on your online account.

Flexible Electronic Payment Solutions Benefits Both Provider and Patient

The current economic situation has the capacity to force patients to decide between discontinuing their routine healthcare appointments or making other payment arrangements. Possible solutions offered by healthcare providers include medical credit cards, or automated electronic payment plans (such as “auto-debit”).

Affordable, electronic payment plan options now play a vital role in the financial health of a practice more than ever before. With declining insurance reimbursement, patients are now personally responsible for a larger portion of their healthcare expenses.

Finances have become a barrier for many patients who are not able to receive the care they want and need.

Easing the financial burden for patients and making it easy for them to plan their budget with an automated electronic payment plan is essential, as it provides the opportunity for preventive care which will inevitably minimize the need for emergency care that results from lack of routine health appointments. It is much less costly for patients and society in general, if routine screening and maintenance healthcare is made fiscally available.

From the healthcare practitioner’s perspective, the predictability that comes with steady, recurring revenues from electronic payment plans is most important during times of economic uncertainty. If providers are completely subject to patient decisions on when to have their routine check-up, they ultimately lose out if a patient cancels due to an unforeseen bill or other such budgetary burden. Payment plans make sure that care is already budgeted for. With greater predictability of income, comes the confidence for providers to take control and better plan for the financial health of their business. For a sustainable system, both the needs of the patient and the provider must be met.

One of the primary benefits of being in private practice is maintaining control over patients and ensuring independence. Most private practices have at some time spent sizable amounts of time and dollars growing an organization and brand that identifies them. In most cases, communicating this brand to patients contributes to a significant portion of the practice’s marketing expense. Successful practices know the importance of converting potential leads into new patients to take full advantage of those marketing dollars. The ability of an office to convert new patients is greatly enhanced by offering electronic payment plan options that have the flexibility to fit into the patient’s budget.

Opting for partner companies who will assist providers in offering flexible, electronic payment solutions will ultimately lead to healthier, happier patients and goes a long way to strengthen and grow a practice.

Making the Switch From Paper Cheques to Electronic Payment

Paper cheques’ days are numbered!

As anyone doing business in Europe will know, cheques are no longer used as a method of payment in most European countries. Rather, it is standard practice for companies to publish their bank details on invoices, so that payment can be made directly to their bank account.

Within North America, cheque usage is on the decline. We believe that the tipping point is fast approaching where cheques will become the exception, rather than the rule, in business-to-business (B2B) payments. A significant number of corporations are planning to migrate the majority of their B2B payments to electronic payments.

There are numerous advantages to using electronic payment methods such as electronic funds transfer (EFT) to pay your suppliers and employees:

  1. Security and internal control is significantly strengthened, reducing chance of fraud and theft. EFT payment approvals utilize strong on-line banking security, instead of much weaker paper-based signature approvals
  2. Paper cheque stock no longer needs to be stored and secured
  3. Clerical work and errors are reduced through automated efficiency
  4. Ability to manage and forecast cash flow is improved. Payments can be set up with various due dates, and post-dated for up to 35 days
  5. Stale-dated cheques are no longer a possibility
  6. Bank reconciliations are simplified, as there will be no outstanding cheques to account for
  7. Cheque printing, mailing and handling costs are eliminated
  8. Payment approval process is streamlined. Payments are ready for approval immediately upon entry into the EFT system. Payments can be approved from anywhere, at anytime, by authorized signing authorities
  9. EFT is environmentally friendly. Paper & ink used in producing cheques and envelopes is eliminated, as is the carbon footprint resulting from the physical distribution of cheques.

There are also a number of benefits to vendors and employees of implementing EFT payables. These include:

  1. Assurance of prompt payment directly to vendor’s bank account
  2. Vendors have improved ability to manage and forecast their company’s cash flow
  3. Time and cost of handling and depositing cheques is eliminated
  4. Risk of lost, stolen or damaged cheques is eliminated

The process to convert to EFT payables is relatively straightforward. Begin by gathering written authorizations from your suppliers to pay them electronically. This information can be collected on a single page form and includes your supplier’s banking information, along with their agreement that payments will be made to the specified bank account. The supplier also agrees to notify you if they wish to change the account to which payment is to be made. These forms should be kept on file in the event of any dispute concerning where funds have been deposited.

Each bank has their own web portal and systems to enable their customers to process EFT transactions via the internet. Security tokens or USB keys, along with a user ID and password, are given to each person requiring access.

Multiple signing authorities can be easily accommodated, as each signing authority is given their own security token and access credentials. Before a payment transaction can be released for payment, all necessary approval authorities must first have signed on and approved the transaction. This is one reason why EFT is considered to be a far more secure method of payment than paper cheques.

Does your organization still pay its suppliers using paper cheques? If so, you may wish to consider joining the growing number of organizations that have converted their payment method from cheques to electronic payment, in the process realizing significant benefits.