Studies have found that digital payments are expected to hit 726 billion dollars in transactions by 2020. That’s because the many types of digital payments available make it easy and convenient to pay and be paid, anytime and anywhere.
That’s why digital payments are worth considering when it comes to your payroll and paying your employees. Here we dive into the different types of digital payments and which are the best for your business.
How Different Types of Digital Payments Work
There are many ways to execute a digital payment, it all depends on how often you will be using it, for how large of a staff, and what type of platform you’re comfortable with.
For the most part, it requires linking your bank account or a business bank account to a payroll system and using it to pay employees. Employees typically receive notice of their pending payment through their email or they will receive the payment immediately via direct deposit.
Benefits of Electronic Payment
There are a number of benefits associated with an electronic payment. Not only is payment easy for your employers to receive and transfer but it also allows you to pay your employees from anywhere in the world.
This means you’re free to build an international team or hire freelancers from other countries. Payments can be scheduled ahead of time, and many payment platforms allow you to create and store invoices, making it a great choice for your records.
Direct deposit is one of the easiest and most common forms of payment in the US. In fact, 82% of U.S workers receive their monthly payments via direct deposit.
Paying via direct deposit does mean gathering and setting the right information, such as the employee’s name, account number, and routing number. However, once the set up is complete the rest is fairly automated and can be done on its own month after month.
When processing direct deposit you have the option to choose from an ACH transfer or an EFT transfer. Each has their own set of pros and cons, you can compare here to find out which option is the right choice for your business.
Payroll cards are a fairly new form of digital payment that has been catching on more and more. Since direct deposit and other forms of digital payments can often take days to be processed, many employees prefer the immediate benefit of having their pay sent directly to a card.
This is also an ideal choice if you find the majority of your employees don’t have bank accounts. Payroll cards work just like debit cards and can be used for purchases or to withdraw funds from an ATM.
Paystand is a new generation platform that is quickly growing in popularity in the world of online payments. That’s because, unlike many other payment platforms, PayStand does not charge it’s users any transaction fees.
Instead, PayStand users pay a monthly fee. Another benefit of Paystand is the number of payment forms they accept including e-cash, foreign monies, e-checks, and even bitcoins.
Paypal has quickly become a household name as one of the original online payment systems. Now with the addition of Paypal Business, small businesses can easily manage their PayPal from any computer or mobile device with internet.
While Paypal has had it’s fair share of complaints in the past, especially in regards to transaction fees, the site has redeemed themselves with a number of features. The Paypal app even features the ability to transfer funds to your card in minutes for just 25 cents.
Square has quickly grown to become a fierce competitor with Paypal. At the moment Square offers one of the lowest rates on transaction fees and even offers a free online store site for retailers.
In terms of processing payroll, Square is ideal for a small staff as it allows for invoices to be created and downloaded.
Stripe has made a name for itself as a powerful checkout platform, but can also easily be used to pay your staff. Like Square, Stripe works best if you have a small group of employees as there is a 2.9% plus 30 cent charge on each transaction.
Stripe does, however, work seamlessly on all types of devices, making it easy for you to access your payroll from your smartphone or tablet.
Dwolla is a great choice for paying employees as it does not require each employee to go and make an account within the platform. All that’s needed is the employee’s email to easily send payment.
While the app does not allow credit card payments, it does have some of the most competitive fee prices for online payment. Transactions below $10 are free and everything else has only a 25 cent fee.
Intuit by QuickBooks creates an easy and seamless payment system that communicates with the rest of your QuickBooks software. This is ideal, as you don’t have to process payroll and then transfer information into QuickBooks.
All of your payment processing, invoices, and tax information will be run through one platform, saving you time and money. This also greatly reduces the number of mishaps come tax season.
While the software itself may be on the pricier side, it’s compatibility and the multi-tool effect is well worth it.
Getting Your Business on Track
From knowing which types of digital payment are right for your business to learning how to create a powerful marketing strategy, the more time you invest in the details of your business the more it will thrive.
Every step you take will bring you closer to taking your career to the next level, so dive in and meet each goal with confidence.