Taking advantage of technology is a key part of running a flourishing online business. In this post, we look at how fintech can be profitably implemented.
Fintech (short for financial technology) encompasses two areas that sometimes overlap: general technology developed for businesses in the finance sector (banks, investment funds, etc.) and financial technology developed for (and made accessible to) businesses of all kinds.
The latter category almost exclusively consists of software tools and services designed to assist with all manner of finance-related issues. Any business owner looking to optimize their operation and boost profitability can achieve significant improvements through the smart use of this area of fintech — here, we’ll look at how to do this when you’re running an online business.
Closely monitor your business expenses
Achieving profitability isn’t just about racking up impressive sales figures: it’s also about keeping your house in order by lowering operational costs and ensuring sensible allocation of resources. Look at the development of efficiency tools in the ecommerce sector: it was the desire to reduce startup costs that drove the development of store builders (they’re designed to require minimal cash investment), and those have become standard use.
But there’s more that can be done, and there’s little sense in starting out with an economical approach before reverting to traditional wastefulness. The fintech world now offers numerous tools that can do things like categorize all your payments (sorting them by purpose, for example) or even help you set aside savings to build up an emergency fund. The right combination of tools can add insight and automation to your regular activity, saving you time and money.
Earn trust by increasing transaction security
We might be used to making online payments, but we’re also more skeptical of them than ever before. When ecommerce first arrived on the mainstream stage, it was assumed that online transactions (and user accounts) were perfectly safe — but obviously that wasn’t quite the case. Over the years, many cases of transaction fraud have made people extremely wary, which can prove tricky when you’re trying to convince someone to make a payment through your site.
The best way to reassure prospective customers is to implement meaningful transaction security and make it clear that it’s in place by talking about it in prominent places (which is to say, don’t mention it in the small text at the bottom of your “About Us” page). Most transaction security services will offer trust seals to catch shoppers’ eyes.
As for which services you should consider, here are some payment processing companies with solid reputations. You should also follow best practices for storing customer data, and talk about all the measures you follow to protect buyers — try using a security-testing service (something like Redscan, for instance) to discover any vulnerabilities in your setup.
Provide more payment options to win conversions
Simply having a secure service isn’t enough to pick up purchases if your payment system isn’t convenient. That’s a core issue of modern ecommerce: people want their buying experiences to be safe and convenient, so failing to manage one of those qualities will push them away. And not everyone uses the same payment portals, so you shouldn’t settle for providing just one.
Some like to use PayPal for all their transactions. Others want to make conventional credit (or debit) card payments. Some want to use other services, particularly mobile ecosystem services like Google Pay or Apple Pay. You may even have prospective customers who want to pay using cryptocurrency, in which case you could find a way to implement that.
You don’t need to support every possible payment gateway, but the more you can allow, the more empowered shoppers will feel to pay as they’d prefer to. There’s a significant symbolic element that shouldn’t be overlooked — customers like being given options.
Wrapping up, there are three core areas in which you can use fintech to bolster your business and elevate your profitability: business expense monitoring and optimization, transaction security and data protection, and payment options.
There are plenty of solutions on the market (aimed at all use levels, from solopreneur to enterprise), so consider your specific requirements and see which ones suit you.
Micro Startups is a business community that celebrates inspiring startups and small businesses of all shapes and sizes. Whether you’re a solopreneur or a hustling startup, Micro Startups has you covered. Find us on Twitter for the latest micro biz news and inspiring entrepreneurial stories @getmicrostarted.