Running a business in today’s challenging economic environment—where inflation is squeezing margins and every dollar counts—is no easy task. To stay competitive, you need to do two things simultaneously: increase sales and keep costs under control. While it may seem easier said than done, and there are many ways to go about tackling the challenge, there’s one tried-and-true strategy that can help your business do both: optimizing your payment processes.
Integrating payment solutions can not only reduce your operational costs, but also position your business to grow. From cutting transaction fees to automating back-office tasks, the right payment partner can help you navigate these turbulent economic times and come out ahead. Let’s dive in.
1. Lower Transaction Fees by Diversifying Payment Methods
One of the most immediate ways your business can reduce costs is by switching from traditional credit card transactions to more cost-effective real-time payment methods.
Real-time payments, such as Interac e-Transfer® or direct-to-bank options like Electronic Funds Transfer (EFT), offer lower transaction fees compared to credit card payments, which charge a percentage of every transaction. While credit cards typically take a cut of each sale—often between 1.5% and 3%—real-time payment methods are more predictable and less expensive, especially for businesses processing high volumes of sales.
Let’s see what that could look like for your business. Say you process $1 million in transactions per month and use credit cards with an average fee of 2.5%. In this scenario, you’d be paying $25,000 in transaction fees every month. By switching to EFT, which charges a flat fee of, say, $0.50 per transaction, and assuming 5,000 transactions per month, your total cost would drop to just $2,500—a savings of $22,500 per month. Over the course of a year, that’s a potential savings of $270,000.
The difference in transaction fees may seem small on an individual basis, but for businesses processing hundreds or thousands of transactions, the cumulative savings can be significant. By moving away from credit cards and embracing real-time payment solutions, your business can make a considerable impact on its bottom line.
2. Reduce Human Costs with Automated AR and AP
Manually handling Accounts Receivable (AR) and Accounts Payable (AP) is not only time-consuming but can also lead to costly errors that drain both time and money from your business. The good news? Payment integrations can automate these back-office tasks, making your operations more efficient while cutting overhead.
By automating processes like invoicing, payment processing, and reconciliation, you reduce the need for manual data entry—which is not only slow, but also highly susceptible to human error. Those little mistakes can quickly snowball into missed invoices, delayed payments, and financial headaches.
With automation, you can lower the labour costs tied to managing these processes. Instead of having your team tied down by repetitive tasks, they can shift focus to higher-value activities that truly drive your business forward. In fact, 84% of companies that have fully automated their AP processes report increased cash flow and savings—proving that automation isn’t just about saving time, but also boosting your bottom line.
3. Streamline Inventory Management with PIM Integrations
For businesses operating in the retail goods sector, managing inventory manually can be a daunting task—especially as your business grows and sales channels multiply. Integrating Payment Information Management (PIM) systems and automating inventory management won’t just save you headaches, it will make online sales more seamless and help drive revenue.
With a PIM integration, your inventory updates automatically as sales are processed, eliminating the need for manual updates and the inevitable errors that come with them. No more worrying about discrepancies between what’s available and what’s listed for sale. This streamlined process not only saves time, but also reduces the overhead costs associated with manually tracking and adjusting inventory.
The beauty of automating these tasks is that it frees up your team to focus on more strategic priorities—like growing your business—while ensuring your inventory is always accurate and up-to-date. Plus, it reduces the risk of overselling or running out of stock, helping you avoid missed sales opportunities and keeping your customers happy.
4. Eliminate the Costs of Disparate Systems by Partnering with a Payment Provider
Running your payment processes with a patchwork of spreadsheets, software, and manual workflows might get the job done, but often leads to unnecessary complexity and added costs. When your systems aren’t integrated, you’re not just spending more time managing them—you’re also increasing the likelihood of mistakes and inefficiencies that can cost your business in the long run.
By partnering with a payments expert, you can consolidate all these tools into a single, streamlined solution. The result? You’ll save time, reduce costs, and improve overall efficiency, allowing you to focus on what matters most—growing your business.
Choosing the right payment partner can be a game-changer. They’ll help you simplify your systems and provide expert guidance on how to automate your processes.This way, you can reduce the operational burden on your team and avoid the headaches that come with juggling disparate tools.
As businesses increasingly turn to more modern payment methods, the global value of virtual card transactions is projected to grow from $2 trillion to $6.8 trillion by 2026. With 55% of firms already adopting virtual cards more frequently, this shift reflects the growing recognition of the simplicity, security, and cost savings modern payment processes offer over outdated methods like paper checks. Plus, virtual card programs can provide additional revenue streams through revenue-sharing opportunities.
But automating payment processes is no small task, and trying to piece it together on your own only creates more complexity. By partnering with a trusted payment provider like Digital Commerce Payments, you can consolidate your systems, reduce costs, and explore new avenues for revenue. Ready to get started? Contact us today to learn more about how our payment solutions can help optimize your business.