How Fast Payment Processing Impacts Customer Satisfaction and Retention

6 min read | Posted on: December 12, 2024

Speed matters in business.

You need to get back to your customers fast. Then, you need to deliver on time. And you need to do it all without compromising quality.

It’s not just what customers want. It’s what they expect. This extends to every interaction they have with your business, too—payments included.

Fast payment processing has a huge impact on customer satisfaction. Quicker means easier and easier means a more positive experience.

This affects retention. The better the experience, the more likely your customers will choose you again.

In this article, we’ll explore the changing expectations of consumers. Then, we’ll explain exactly how faster payments lift customer satisfaction.

We’ll shift our focus to customer retention and explain how faster payment increases it. Finally, we’ll give you ways to bring faster payment processing to your business before offering our top takeaway tips.

There’s no time to wait! Let’s jump right into it.

The Changing Payment Expectations of Consumers

With the whole world at our fingertips, we expect things to happen faster than ever.

We want on-demand streaming and next-day shipping. We also want fast, secure, and convenient payments—the numbers show this trend in action.

Just 13% of people use cash for most purchases, according to research by Gallup. 64% percent of people believe the US will become entirely cash-free in their lifetime.

Checks are also nowhere near as popular as they used to be. In fact, 6 in 10 people in Gen Z don’t even own a checkbook.

In contrast, digital payments are on the rise. In 2024, the total amount transacted digitally in the US will reach $3,037 billion. Predictions forecast a 10.73% annual growth rate between now and 2028.

There are no two ways about it. Slow and steady is not winning the race. Instead, speedy digital payment processing is outrunning the competition, with no signs of stopping in sight.

How Faster Payments Enhance Customer Satisfaction

Trends are one thing. But knowing how they apply to your business is another.

It’s this practical application that transforms stats and research into actionable steps that sharpen your competitive edge.

So, how exactly do fast digital payments enhance the customer experience? How do they eliminate pain points associated with traditional payments? And what might all this look like in the context of your business?

Let’s find out.

Digital Payments Are Processed Fast

When a payment is made via a digital method, the transaction is processed quickly—in some cases, it might even be instant.

For example, if your customer pays by credit card, you’ll see the fund in your account in a matter of days.

In contrast, if they pay you in cash, it might be a week before you get to the bank and deposit it. And that’s not to mention the time it takes to get in your car, drive to the bank, and line up.

It’s easy to see why fast processing is beneficial for businesses. But how does it improve the customer experience?

Well, it helps them settle their balance sooner. They don’t have to wait for checks to clear. Instead, they get a better understanding of their personal finances.

It can also mean they get their product or service quicker. You might wait until you have the funds before you deliver what they’ve purchased.

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Customers Don’t Need to Withdraw Cash

Back in the day, carrying cash was the norm. Now? Not so much.

Most of us don’t want to get large sums of money out. It’s a risk. What if it’s misplaced? What if it’s stolen?

Because it’s not commonplace, your customer would likely have to make a special trip to the bank. This is an added hassle that takes away from the overall experience.

Your Customers Are Familiar with Digital Payments

Credit cards are the most popular payment method in the US. Even non-traditional processors like PayPal process huge amounts of transactions.

These payment methods are familiar, especially to younger, more tech-savvy generations. It’s what they’re used to, which makes them the easiest way to pay.

The easier your payment process, the less stress, friction, and frustration it causes. This equates to a better overall experience.

Why Customer Retention Is Increased by Faster Payments

Customer retention is a measure of how many customers stick with you. The higher your retention rate, the better.

Payments play a role in the customer experience. And it’s this experience that decides whether a customer buys from you again or switches to a competitor.

Here are some of the ways faster payments directly increase your retention rate.

Faster Payments Are Convenient

Here’s an insight worth noting: Customers will pay 5% more for convenience.

This tells us that an easy process means a whole lot to the people who buy from you. It’s so valuable that they’d even fork out extra for it.

Fast payments are, by their very nature, more convenient. Your customers don’t have to spend their time making them. It all happens in minutes. This boosts the customer experience and inspires loyalty.

Faster Payment Methods Can Be More Secure

Faster payment methods like credit cards or online payments are often more secure.

Cash carries the risks of misplacement and theft. Checks are targets for fraudsters. One report found that 47% of organizations experienced paper check fraud in 2023.

Digital payments are not immune to fraud. But they do have the added benefit of advanced security technologies.

For example, many payment processors use encryption, AI-powered fraud detection, and other innovations. These keep your clients’ payment data safe.

This is critical. A single breach might be enough to break the trust you’ve worked hard to build. And it’s this trust that forms the foundation of long-lasting customer relationships.

Faster Payment Methods Reduce Disputes

When payments are processed fast, your customer has confirmation sooner. They aren’t left wondering whether the transaction went through.

This can help prevent payment disputes. Customers who have a seamless payment experience are more likely to choose you again.

The benefit goes further. Because you have fewer disputes, you have more resources to dedicate to other business areas. You can improve your services and grow your business.

Ways to Bring Faster Payment Processing to Your Business

Faster payments make smart business sense. They improve the customer experience. And they boost retention.

How can you speed up your payment processing? By adopting digital payment methods. This might include:

Credit and debit card payments
Contactless payments
Automated clearing house (ACH) payments
Digital wallets like Apple Pay and Google Pay
Online payments like PayPal
Buy now pay later (BNPL) options

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To decide which options are right for your business, consider these questions:

What payments are your customers likely to use? Credit and debit cards are universally popular. Digital wallets might be better suited to customers who are more comfortable with technology.
What are the fees? Card, contactless, and online payments all have pretty comparable fees. If you regularly process larger transactions, consider ACH payments.
Will you need to purchase hardware? Contactless payments, for example, require you to buy a card reader. This might be a traditional card reader or one that connects to your mobile device.

You’ll also want to integrate your fast payment methods with your invoicing software. This can streamline and speed up the entire billing process—not just the payment itself.

For example, software like Invoice Simple offers automation features. You can quickly calculate totals and send invoices. You can even remind customers of upcoming payments and notify them when their bill is overdue. You can do all this with zero manual effort.

Software also reduces the risk of errors. If you are writing invoices from scratch, you might make a mistake. You’ll then need to correct the issue, which can cause delays. It can also dampen the customer experience.

Software also helps with record-keeping. Because invoices are generated automatically, they are numbered and saved in a way that makes sense.

Finally, if a customer has a question, you can quickly pull up their records. You can give them a meaningful answer in record time.

Top Takeaways for Faster Payment Processing

Keen to take action? Get started with super speedy payment processing today. Follow these tips:

Decide which digital payment methods work for your business. Consider what your typical customer prefers. Weigh the fees with the benefits.
Get yourself set up. Open merchant accounts with your new payment processors. Configure the settings so they align with your business.
Purchase your hardware. Now is the time to get a card reader for your new payment method.
Research invoicing software. Don’t stop at payments. Refresh your entire billing process and take your customer experience to a new level.

Posted in: Operations