As the business environment has evolved into a global market, payment systems have been changing rapidly in the past two years.
New-age technologies now aim to better service customers, help businesses expand internationally and offer more consumer insights.
Many Australian businesses have been slow to adopt new technologies, and their payment technology is unable to meet consumer demands and service international customers efficiently.
Speaking to the Australian Payments Clearing Association last year, Reserve Bank of Australia governor Glenn Stevens said elements of Australia’s payments infrastructure are “a bit dated”.
“It is very clear that both individuals and businesses are demanding greater immediacy and greater accessibility in all facets of their day-to-day activities,” Stevens said.
“This includes payments.”
These new emerging systems have the capacity to offer more customer insights, help you establish a better relationship with your customers and allow you to easily accept international payments.
SmartCompany spoke to four payments professionals about innovative changes in the sector that small businesses should know about:
Most people have heard of digital payments system PayPal, but what many businesses aren’t aware of is PayPal’s latest innovation which changes the way businesses engage with customers and takes its payments system offline.
PayPal can now be used in Australian cafes, restaurants, bars and retailers through a digital wallet which allows people to pay on the spot without cash or card via a mobile application.
PayPal has worked with point of sale software providers such as Kounta, MICROS, Island Pacific and Vend to integrate PayPal payments into point of sale (POS) solutions.
PayPal’s digital wallet gives customers a range of new freedoms such as ordering and paying for their morning coffee from the train, or if the customer has forgotten their purse or the restaurant doesn’t accept card, they can pay from their phones while dining.
PayPal spokesperson Adrian Christie told SmartCompany this allows SMEs and sole providers to accept payments via mobile phone. PayPal is opening up the application program interfaces (APIs) and the POS providers can integrate this into their solutions.
“We’re opening up on two fronts by giving tools directly to the merchants and also partnering with ePay providers,” he says.
The technology is being used in 150 cafes and bars across Sydney and a recent partnership with EatNow will mean PayPal users will soon be able to order from 2,000 restaurants Australia-wide.
PayPal Australia managing director Jeff Clementz said in a statement the aim of the technology is to foster a more direct relationship between businesses and their customers.
“Mobile has driven dramatic shifts in the path to purchase, providing Australian retailers more opportunities to interact with their customers and engage with them at a number of touch points beyond the traditional store front,” he said.
PayPal hopes the technology behind the digital wallet will be applicable to more businesses in the future and will also be usable across any digital device.
“Just look at the fact you still have parking metres and you have to queue for cinema tickets, this isn’t necessary. A digital wallet allows people to transact on a tablet, mobile, computer and even Google Glass in the future,” Clemetz said.
Kounta, a scalable digital POS solution which works like a cash register, can be securely accessed from any device, anywhere, and across a range of channels including in-store, online and mobile. The software supports new mobile and online payment methods like PayPal and Xero, but it is also compatible with traditional equipment and it can accept cash payments.
Kounta founder and chief executive Nick Cloete told SmartCompany it’s ideal for small businesses.
“It’s designed to be a low cost subscription based model at $50 a month, and we’re quickly approaching 1000 merchants,” he says.
“Recently we also opened up Kounta so that any merchant in the world can use it and set it up.”
Cloete says Kounta was created out of an “obvious need” for a local low cost payments system solution which would give “offline brick and mortar stores an online experience”.
Cloete believes payment systems need to create an interaction rather than a transaction. A new feature of Kounta is that businesses can send marketing emails and promotions to their paying customers, as well as allowing their customers to earn loyalty points and rewards.
“Our customers have the capability to link sales to their consumers and through this build up their customer list. From there they can use that customer list however they want to send out promotions or deals,” he says.
“Kounta tracks each of the customers and sees exactly what they purchased, which store they purchased it from and who the staff member was who served them.”
Cloete says businesses can utilise these analytics to better their returns.
“We can provide to our merchants with customer purchase details at the impact point. Merchants can track what the high selling items are, or who are the bestselling staff, and then this can be used to provide some sort of benchmarking for the businesses, as well as providing comparative points to others in their industry,” he says.
Cloete says Kounta becomes most powerful when you connect it with other online payment technologies and analytics services.
“It’s flexible and scalable to any size business whether it be single store, multi-store or a franchise-sized business.”
Pin Payments is an all-in-one payment system aimed at start-ups and small businesses which eliminates merchant accounts, making it easier and cheaper for businesses to sell to international customers.
Co-founder of Pin Payments Grant Bissett told SmartCompany he’d been working in the tech industry for more than 10 years when he realised Australian merchants “needed to be brought up to date”.
Typically to accept credit card payments from a global audience requires a merchant account (an account which allows businesses to accept payments from payment cards), but Pin Payments provides an API-driven multi-currency system with no need for a merchant account, as the funds are transferred directly to your bank account.
“API’s let one piece of software talk to another and if your payment system doesn’t offer this integration it makes customers go away from your website to make the purchase. Businesses are losing sales because of this,” he says.
“Selling in a foreign currency such as USD is not impossible without it, but it’s practically unachievable for new and small businesses. Without API integration it also means payments can’t be connected to newer technologies like mobile apps.”
To afford merchant account fees, Bissett says small businesses would need to make concessions and adjust their targets to afford it, as well as the setting up process being “time intensive”.
“Pin Payments offer credit and debit card payments in USD and AUD. Everything is built in and automated to your regular bank account. You don’t have to set up a merchant account and there is no security deposit required,” Bissett says.
“We also have fraud detection software and other security measures built in.”
Proceeds from the businesses sales are transferred to the business’s bank account each day for transactions made seven days prior. This settlement schedule is designed to allow customers to make refunds and also stops businesses needing to pay a security deposit.
In the four months since launching, Pin Payments has 400 active merchants using the new technology and there are more than 1900 currently registered as using the trial system.
US-based payments system company Braintree started selling in Australia at the end of 2012 and has just opened its first office here. It is used in 130 currencies and powers more than US$10 billion a year.
Braintree helps online and mobile businesses around the world accept credit card payments and in Australia it helps start-ups to establish merchant accounts. It also supports all major coding languages and mobile operating systems.
The company’s international general manager Klas Bäck says the inspiration for the system was the difficulty start-ups faced finding modern payment solutions which allow international transactions.
“We are filling this void by making next-generation payment capabilities – such as one touch purchasing, mobile payments and foreign currency acceptance – much more accessible for online and mobile commerce companies worldwide,” he says.
“Our service replaces the traditional model of sourcing a payment gateway and merchant account from different providers.”
If a business decides to switch to a different payments system after using Braintree, one advantage of the cloud-based system is the data is portable.
“Braintree believes your data belongs to you. If a business ever needs to leave us, they can easily take their customer data with them,” Bäck says.
Braintree’s customers include 99designs, the ABC, Microlancer and WooBoard.