eChecks, electronic checks, ePayables, virtual payments … all are similar and nearly synonymous with one another. Nevertheless, they represent the new wave of payment solutions for 21st century commerce.
For centuries, paper checks and money have been the norm for transactions of goods and services. Cash is an affordable option, but it’s vulnerable to theft and inconvenient for large transactions, especially if the two parties live far from one another. Checks are more convenient than cash, but payments can be slow and checks are susceptible to fraud. Now with an interconnected world made possible by the rise of the internet, commerce demands a quick, secure, and convenient payment solution. There’s never been a better time to adopt a virtual payment solution to replace outdated and vulnerable payment methods.
How Do Virtual Payments Work?
When a payment is ready for issue, the virtual payment system generates a unique 16-digit number (similar to that of a physical credit/debit card) as a one-time payment for a specific amount. This payment information is then delivered to the payee, along with the invoice or explanation of benefits. The payment recipient enters the virtual card number and transaction amount into a point-of-service card terminal. Once the payment is processed, funds are delivered directly to the recipient’s bank account.
Why You Should Consider a Virtual Payment Solution
Deliver Payments on Time!
Once a paper check is placed into the postal system, it’s out of your hands. The envelope may get to its intended recipient on time, or it could be lost in the mail. Lost payments result in a lot of delay and frustration for both the recipient and the payer.
Once the virtual payment information is delivered, the recipient can complete the remittance process with just a few easy steps. No need to wait on the mail or visit a bank to get the funds into the account.
Enjoy Greater Client Satisfaction!
This point builds on the previous one. Slow payments, like with a check, can seriously hinder a business’s ability to function. A lethargic cash flow and the inability to function day-to-day can result in frustration, resentment and anger.
The speed of a virtual payment allows a business to increase cash flow and thereby allow continued operations, including being able to seek out and take on new business. Plus, faster payments result in increased client satisfaction, and higher client satisfaction means stronger business relationships. It’s a win-win.
Paper checks are costly. Sources estimate that a paper check can cost up to $8.00 per transaction1, which includes the cost of administrative fees, paper, ink, postage, and envelopes. And if the payment gets lost or stolen, then costs can double because the payer has to reissue the check.
With virtual payments, the cost of postage, paper and ink are eliminated which can result in significant savings. In fact, one DataPath client reduced its costs by 74% after adopting a virtual payment solution.
Cut Down on Fraud!
When a payment is made through paper check, sensitive banking account information is vulnerable to fraud. In fact, checks are the most-often targeted payment method by criminals committing fraud attacks2.
Virtual payments streamline the whole payment process, and there are no intermediate parties between payment processor and payee. The payment delivery process is initiated from the recipient’s point-of-service (POS) terminal and delivered directly to the bank account. No sensitive banking information changes hands, greatly reducing the incidence of fraud.
DataPath Provider Payments is a virtual payment solution that streamlines, secures, and speeds up the claims reimbursement process for medical providers.
1 2013 AP Automation Study