Cash flow in a mobile world
Mobile technology has been streamlining business practices since the introduction of the mobile phone in the 1980s. Fast forward 3 decades and telecommunications has enabled the humble analogue mobile phone to become digital, transfer data, access the internet and become almost indispensable for modern living. Consumers are no longer using the mobile phone only for communication but to consume content and more importantly, for businesses, research and purchase goods and services. Businesses are also taking advantage of this mobile technology with cloud based accounting and management systems, making their websites mobile responsive and even apps to collect payment.
Traditionally businesses such as tradies after completing a job had to go back to the office or home to enter details into their systems and issue an invoice. Nowadays mobile technology allows them to enter their details into their online accounting systems and issue invoices straight away or even to collect payments and issue receipts on the go with an app on their mobile phone and a small Bluetooth card reader for credit or debit card payments. These systems and the ability to collect payments straight away is also helping other businesses such as pop up shops, food vans and even service businesses such as tax agents to go to where their customers are and never miss a sale.
In fact across Westpac’s SME customer base around a quarter are currently using mobile devices and tablets to process payments, with an estimated 14 million transactions valued at $22.8billion made in 2016. While many of these transactions are being conducted over the internet some are being driven by improving mobile payment technology.
Some payment apps, like Westpac’s Genie, are also capable of displaying a business’s price list, allowing them to select items just by touching the screen. They will then calculate the total bill and either issue an invoice for later payment or a receipt for payment by cash or credit card on the spot. These systems will also allow follow up emails or SMS’s to be sent to remind people of outstanding invoices. All this data can then be downloaded and imported to the businesses accounting software.
This is great news. Anything that helps a business collect payments quicker and easier from their customers can have a positive effect on their cash flow. Combine that with using a payment solution that customers want to use and the reporting and follow up functionality, it would seem businesses would be clamouring to use this technology.
Yet, with all the benefits of using a mobile payment solution, it was surprising to find in a recent Westpac Customer Panel, which surveyed 222 Small and Medium Enterprises (SMEs), 87 per cent reported that their business did not use a mobile payment system.
When we asked our Customer Panel why they hadn’t adopted a Mobile Payment System, SME owners said they had no use for it (43%) or that their business was too small (31%). However, after learning more about mobile payment solutions, almost half of the surveyed group perceived it to be extremely or very appealing and 18 per cent claim they would likely use it.
Westpac’s research highlights that when businesses make the time to learn more about new systems, they can find it incredibly rewarding and appreciate that adoption is necessary to remain competitive.
Mobile payment technology has not only helped businesses improve their cash flow by allowing faster payment for their goods and services, it is also allowing them to become more mobile and closer to their customers.
Rob Lockhart Financial Educator Westpac
The articles represent the views of the authors and not necessarily that of the Bank. You should seek independent professional advice before acting on any matters set out in the articles.