What is Zero-Touch Payment Processing?
Zero-Touch payment processing, also called contactless payment, is a secure way to virtually collect payments for goods and services without using cash or paper checks. And it's more popular than ever.
The reason is simple: While traditional payment processing is highly manual and requires multiple physical touches, zero-touch payments are processed through digital channels, can be managed remotely, and are automated to help you streamline collections and improve cash flow. But does it work?
Research from PYMNTS found that 87% of businesses that have shifted to automated, touchless AR processes say that their process is faster, and 79% said that payments are more efficient. Other benefits include a streamlined customer service experience, cost savings, DSO improvement, and better collections.
And while zero-touch payments have been around for a while, demand for this digital transformation skyrocketed during the pandemic. Even in early 2020, a study from Mastercard found that 82% of consumers felt contactless payments were a cleaner way to pay, and these options grew 10x faster than any other method.
Let's dig into how his payment option works, what electronic payments are available, and the different benefits of implementing Zero-Touch payment processing for B2B payments
Defining the Zero-Touch Payment Methods
Many associate touchless payments with tap-and-go credit cards, but other zero-touch alternatives don't carry transaction limits and hefty fees. There are also payment options like ACH, digital bank transfers, digital wallets, smart cards, and eChecks.
In general, Zero-Touch payment methods for B2B companies can be classified into two areas: credit and bank payment systems. Both types require a secure payment gateway to accept and process payments.
Zero-Touch Credit Payments
- Credit Card (Virtual Terminal). Virtual terminals let you securely charge credit cards remotely from a mobile device, computer, or tablet.
- Smart card. A contactless credit card with a microprocessor that can be loaded with funds.
- Virtual card. A digital form of card payment that allows you to create a unique 16-digit virtual card number that can be tied to a bank account.
Zero-Touch Bank Payments
- Direct Bank Payments. A direct (or digital) bank payment moves money electronically from one bank to another.
- eCheck. A digital version of a paper check that electronically transfers money from a bank account, typically a checking account.
- Stored-value card. A card with pre-loaded funds that can be used to complete a transaction, such as a gift card or a charge card**.**
- Electronic Funds Transfer. A bank transfer processed over a computer network among accounts at the same bank or separate institutions.
- Automated Clearing House (Virtual Terminal). Virtual terminals also allow you to process ACH payments over a computer-based clearing house.
Recommended: Payment alternatives to cash and paper checks
What Does Zero-Touch Implementation Look Like?
Zero-Touch payment processing isn't only about collecting payments digitally; it's also about how you manage accounts receivable (AR) for your business. For an actual contactless payment experience, a company must set aside resources to digitize and automate its AR process to collect payments faster, safer, and more efficiently.
A digital transformation is necessary since a Zero-Touch payment strategy can include several different features and customizations, such as:
- Self-service payment options for customers
- Digitized documents, operations, and records
- Automated reconciliation, data entry, and other manual AR tasks
- Recurring billing options
- Saved fund-on-file for future payments
As a result, merchants will often need to invest in a payment gateway and integrate it with their chosen ERP.
Core Zero-Touch Credit Payment Features
When looking at potential electronic payment solutions, you look for these core features that enable Zero-Touch payments:
- Payment Portal. Customers can pay one or multiple invoices simultaneously via an online payment portal. It also supports a variety of payment options.
- Payment Links / Pay Now Button. Customers can make payments directly from email invoices, invoices, billing reminders, sales orders, and statements.
- Email Invoicing. Email and schedule invoices to customers.
- Billing Reminders. Send customers automated billing reminders about upcoming payments.
- Recurring Billing / Auto-Pay. Enroll customers on monthly or custom payment schedules and withdraw money from their credit card or bank account.
- Payer Portal. Allows customers to log in and view current and past invoices, payment history, download receipts, and update payment information.
5 Benefits of Using Zero-Touch Payments
Now that we've gone over the basics of Zero-Touch payment processing let's look at how Zero-Touch can benefit your business.
1. Offer flexible payment options and get paid faster
You can accept multiple payment options remotely, including credit and debit cards, electronic checks/ACH, and zero-fee digital bank payments. Customers can self-service and set up recurring payments, allowing an automated approach to making payments:
- Digital payment portal. When you set up a digital payment portal, there's no need for your team to be there to collect the payment manually. You can offer customers 24/7 access to make payments while reducing your overheads.
- Custom reminders. It can help to send a friendly reminder when payment is due, but not all clients are the same. You can create custom plans for each client or category within the software.
- Faster payment options. Paper checks may take weeks to arrive by mail, but electronic payment options allow your customers to use a 'Pay Now' from within the digital invoice. It's fast, easy, and means you get paid much faster.
2. Increase efficiency to save time and money
Payment information goes directly into your accounting system, eliminating data entry and reducing opportunities for errors and misunderstandings.
- Scheduled payments (recurring billing): Send out invoices and initiate payments automatically at specific dates and times.
- Auto-pay. Get pre-authorization and securely vault customer payment information so you can authorize, charge, and collect payments automatically.
- Automatic Reconciliation. Automatically reconcile payments to bank accounts and book payments to invoices and sales orders in your accounting software.
3. Significantly reduce transaction fees
- No fees on bank payments. Paystand charges no fees on direct bank payments made via Paystand's bank-to-bank network (covers 98% of all commercial accounts and is used by over 350K businesses).
- Wholesale card rates. Access our wholesale credit card processing rates with no additional fees or markups.
- Least-cost-routing. Automatically steer customers to the payment rail, resulting in the lowest cost to the merchant.
- Payer-Pays-Fees. Control whether you absorb the cost of fees, split them, or pass them on to your customer. You can even set a threshold that decides for you based on the invoice amount, customer location, or customer type.
4. Manage receivables remotely anytime, anywhere
You don't have to be in the office to keep your A/R operations running smoothly. Zero-Touch allows you to send invoices, collect payments, store payment information, and remotely manage your entire payment process. That means you can get paid whether working from home, visiting clients, or out on the road.
- Dashboard. You can use it to manage payments and refunds, run reports, monitor your integration, and more. Includes useful analytics and charts that provide insight into the performance of your business.
- Virtual terminals. Take payments on behalf of customers, when authorized, from your dashboard. You can also enter information from previous payments, filled-in forms, or existing contracts.
- Reporting Run reports on your payments and accounts receivable, so you can see which clients pay on time and which are frequently late. You could then adjust your payment terms to suit each client.
5. Better payment tracking and ledger management
Once a payment initiates, what happens next? Traditionally you would wait until the due date and keep running reports to see if you've been paid. And then start chasing if the money hasn't arrived. But with Zero-Touch payments comes automatic tracking:
- Fund verification. Authenticate identity, verify good funds, and track payment settlement. Our real-time fund verification can determine if an account has sufficient funds to pay. This eliminates chargebacks, processing fees, and costly, time-intensive follow-ups.
- View payment status. Quickly see your collected and pending receivables using standard or custom periods and group your receivables into categories based on status and type. Receive updates the moment payment has been deposited in your account.
- Digital audit trail. Automatically create digital records of every transaction. Paystand also electronically certifies payments (from invoice request to paid receipt) to ensure your payment history is secure, electronically auditable, independently verifiable, and free of tampering.
- Digital time-stamping. Paystand imprints an instant digital time-stamp (cryptographic hash) on the blockchain for each transaction made over its network to confirm a payment occurred.
See Zero-Touch Payments for Yourself
Schedule a free demo with one of our AR specialists to learn more about Zero-Touch Payments for your business.