In an era where convenience reigns supreme, electronic payments have emerged as an essential service for retail merchants. They come in handy for this industry that heavily relies on faster and seamless transactions. Data by Statista shows that global retail e-commerce sales reached $5.8 trillion in 2023, and this figure is expected to surpass $8 trillion by 2027.
To compete in this growing sector, retailers are embracing the efficiency, security, and seamless experience offered by electronic payment methods. These digital alternatives are transforming the retail sector from credit and debit cards to mobile wallets and contactless payments.
However, with the technological advancements in payments, most retail merchants have to find a reliable partner that can provide a platform to accept electronic payments. iCG Pay, formerly iCheckGateway.com, helps merchants set up complementary payment technologies to enhance the customer experience.
This article delves more into the reasons why electronic payments are set to dominate the retail industry. But first...
How Do Electronic Payments Work?
Electronic payments facilitate transactions between buyers and merchants. They don’t use physical currency like cash and paper checks. Instead, all the funds are transferred electronically. Here’s how it works:
- A customer initiates a payment via a credit or debit card, mobile wallet, or bank transfer.
- This information is communicated with the merchant's payment processor.
- The processor verifies the transaction details and ensures the availability of funds before authorizing the payment.
- The funds are transferred from the customer's account to the merchant's account electronically within seconds.
These online payments are processed securely, often incorporating encryption and data tokenization in the merchant systems to safeguard sensitive financial information.
Why Are Retail Merchants Shifting to Electronic Payments?
Gone are the days when businesses relied on slow manual processes. This shift is due to the growth in online shopping, with data showing that 15% of digital shoppers spend money in e-grocers and supermarkets, 14% use branded websites, and 13% prefer retailer websites.
The same is happening with payments. Let’s examine some of the reasons why retail merchants are using electronic payments:
Increased Sales and Revenue
Accepting electronic payments expands a retailer's customer base, as many consumers prefer the convenience and security of digital transactions over cash. For instance, merchants that choose cash over accepting credit card payments could lose out on business. This is because customers prefer to pay using credit cards at the point of sale due to rewards programs and ease of use.
Electronic payments cater to diverse payment preferences, which attracts more customers and boosts sales. Customers are more likely to make impulse purchases when the payment options are quick and easy.
Positive Customer Experiences
Approximately 13% of customers surveyed abandon their carts during checkout due to insufficient payment methods. Therefore, to boost your sales and customer experiences, you need to adopt electronic payments that offer a seamless and efficient checkout process.
With options like contactless payments and mobile wallets, customers can complete transactions swiftly, reducing wait times and enhancing satisfaction. Electronic payments enable retailers to offer various payment options tailored to their customers' preferences, further enhancing loyalty.
Streamlined Operations
Electronic payments will become the norm in the future because they streamline backend operations. They automate the transaction process; therefore, retailers don’t have to deal with paperwork and manual payment processing.
Furthermore, retailers that partner with payment gateway providers like iCG Pay access integration capabilities with existing inventory management and accounting software. This efficiency translates into cost savings, allowing businesses to strategically allocate resources and focus on core operations.
Access to Valuable Data Insights
There are about 33.3 million small businesses in the U.S. To compete against all these other retailers, you need valuable data insights. A major advantage of using electronic payment systems is that you can generate this data for decision making.
For instance, you can gain insights into customer purchasing behavior, preferences, and trends and use this information to enable targeted marketing campaigns and personalized promotions.
Enhanced Security
Unlike cash transactions, electronic payments offer robust security measures to protect both customers and merchants against fraud and theft. Advanced encryption technologies, tokenization, and authentication protocols safeguard sensitive financial data, reducing the risk of unauthorized access.
Working with a reliable payment processor like iCG Pay provides systems with real-time fraud detection and prevention capabilities. You can reduce your PCI scope, instilling confidence and trust in merchants and customers.
What Electronic Payments Trends Should Retail Merchants Adopt?
Consumers today gravitate towards electronic payments due to the increased adoption of smartphones. Therefore, if you want to boost your payment services, here are the options you should consider:
NFC Mobile Payments
Merchant industries such as grocery stores, eateries, and gas stations have been the top adopters of near-field communication (NFC) mobile payments. Consumers can tap their mobile devices and complete transactions without needing physical cards or cash. NFC payments accelerate the checkout process, reducing wait times.
SMS Payments
You can boost your business’s efficiency by implementing text invoicing. SMS payments allow merchants to instantly notify customers of bill payments. With this prompt, customers can use the secure text link to complete the transaction.
IVR Payments
The cost of hiring new customer service staff can increase business costs. However, with IVR call center solutions, merchants can increase customer engagement and accept payments without incurring expensive hiring costs.
When you get IVR solutions from payment gateway providers like iCG Pay, you can collect online ACH and credit cards on a single platform. Furthermore, these transactions pass through a secure web portal; therefore, you don’t have to worry about the payment data.
Virtual Terminal
The future of payments includes web-based virtual terminals. Merchants can integrate this internet-enabled payment management system to process secure payments. Virtual terminals ensure you get paid quickly and make it easy to set up single and recurring payments.
QR Payments
According to estimates, over 99 million people across the U.S. will be scanning QR codes to pay in 2025. Because of this, QR code payments are now common in merchant stores. Their popularity is also because they are contactless, faster, and highly secure.
Partner with iCG Pay for Seamless Electronic Payments
Your business needs a robust and seamless payment solution. To accept multiple electronic payments, consider partnering with an experienced processing partner like iCG Pay. Our experienced fintech developers have created a single platform that combines ACH and credit card processing with unified reporting.
With our APIs and plugins, you can create a payment platform that is customized to your business needs. Partner with us today!
