Types of Digital Payments You Can Pay Employees With

Studies have found that global digital payments will top $6.6 trillion in 2021.

Contrary to what you might expect, Western nations are not leading the way to a completely cashless society, so don’t expect the USA, UK, Western Europe, and many other areas to be the first to achieve the milestone. Developing nations have often stopped relying on credit cards and used new payment solutions.

China, India, Eastern Europe, Africa, and other developing nations use digital wallets, mobile payments, and other online payment solutions. Paying in cryptocurrency is not the future. It’s the now!

Tech firms are happy to accept cryptocurrency in payment. Plus, when a country makes Bitcoin legal tender, you know others will follow this lead – if it works!

Even in the USA, the adoption of newer payment solutions is at a snail’s pace. For example, paper checks still make up nearly 50% of all business payments even though the cost to the business for using a check is at least $4. Federal Reserve Bank of Philadephia has predicted the end of paper checks will happen by 2026!

Also, 25% of the population in the USA couldn’t participate in a cashless payment society. Therefore, while there are some exciting developments in payment solutions, the following different types of digital payments are for US businesses.

How Different Types of Digital Payments Work

There are many ways to execute a digital payment. It depends on how often you use it, how large the staff is, and what 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 email or will receive the payment immediately via direct deposit.

Benefits of Electronic Payment

Several benefits are associated with electronic payment, including its quick and easy use. Employers can pay workers from anywhere in the world.

Today, remote working means you can create an international team or hire freelancers from other countries as a business. Payments can be scheduled ahead of time, and many payment platforms allow you to create and store invoices, making them an excellent choice for your records.

Direct Deposit

Direct deposit is one of the easiest and most common forms of payment in the US. In fact, 82% of US workers receive their monthly payments via direct deposit.

Paying via direct deposit does mean gathering and setting the correct information, such as the employee’s name, account number, and routing number. However, once the set-up is complete, the rest is relatively automated and can be done on its own month after month.

When processing direct deposits, you can choose between an ACH transfer and an EFT transfer. Each has its own pros and cons, so do your research.

Payroll Cards

Payroll cards are a relatively new form of digital payment that has been catching on more and more. Since direct deposit and other digital payments can often take days, many employees prefer the immediate benefit of having their pay sent directly to a card.

This is also ideal if most employees don’t have bank accounts. Payroll cards work like debit cards and can be used to purchase or withdraw funds from an ATM.

Paystand

PayStand is a new-generation platform that is quickly growing in popularity in online payments. Unlike many other payment platforms, PayStand does not charge its users 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

Paypal has quickly become a household name as one of the original online payment systems. With the addition of Paypal Business, small businesses can easily manage their PayPal from any computer or mobile device with an internet connection.

While PayPal has had its fair share of complaints in the past, especially regarding transaction fees, the site has redeemed itself with some features. The Paypal app even features the ability to transfer funds to your card in minutes for just 25 cents. Plus, PayPal has cryptocurrency options for payment and sales.

Square

Square has quickly grown to become a fierce competitor to PayPal. At the moment, Square offers one of the lowest rates on transaction fees and even provides a free online store site for retailers.

Square is ideal for a small staff to process payroll as it allows for invoice creation and download.

Stripe

Stripe has made a name for itself as a powerful checkout platform, but it can also easily be used to pay your staff. Like Square, Stripe works best if you have a small group of employees, as each transaction has a 2.9% plus 30 cent charge.

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

Dwolla is an excellent choice for paying employees as it does not require each employee to create an account within the platform. All that’s needed is the employee’s email to send payment quickly.

While the app does not allow credit card payments, it does have some of the most competitive fee prices for online payments. Transactions below $10 are free; everything else has only a 25-cent fee.

Quickbooks

Intuit by QuickBooks creates an easy and seamless payment system that communicates with your other QuickBooks software. This is ideal, as you don’t have to process payroll and transfer information into QuickBooks.

Your payment processing, invoices, and tax information will be run through one platform, saving you time and money. This also dramatically reduces the number of mishaps come tax season.

While the software itself may be pricier, its compatibility and multi-tool effect are well worth it.

Getting Your Business on Track

From knowing which types of digital payment are suitable 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 confidently meet each goal.