Almost all companies are currently tied into the “cloud” in some form or fashion. Whether via email, content management, or some other digital transformation initiative, the cloud has been infiltrating organizations and will continue to do so. IT infrastructure is moving to the cloud, tapping into “as-a-Service” offerings rather than local hosting, which eliminates the need for IT departments to dedicate time and resources to the deployment and maintenance of in-house hardware and software.
Payments is a part of this movement. Cloud payments have been gaining momentum, enabling for the acceptance and processing of payments over the internet rather than via physical devices. To look at why this method is garnering attention, we’re going to focus on some of the benefits for merchants and anyone else that accept payments.
The traditional point-of-sale system has some limits to what types of payments can be accepted and how. On the other hand, cloud-based payment systems provide a lot more flexibility. These systems allow for transactions via mobile devices (smartphones and tablets), receipts sent directly to customers via email, and truly omnichannel payments. Cloud-based payments enable acceptance both online and via mobile along with EFTPOS systems. As more consumers adopt mobile wallets and other mobile payment methods, this type of flexibility will become paramount.
Speed and convenience are the watchwords when it comes to payments. For businesses, this means the ability to collect payment faster without the extra paperwork. Cloud-based payments tackles both items on the wishlist, enabling easy integration with third-party accounting and operations software. What’s more, businesses can access real-time reporting and deep insights on sales and order information from anywhere at anytime. Having immediate access to this information streamlines operations and simplifies resource management, resulting in greater efficiencies across-the-board. It’s a far cry from the manual reporting and data entry of legacy systems that require reconciliation across multiple systems, including CRM and ERP.
As with any cloud-based application, payments operations can scale more easily when they occur via the cloud as opposed to physical POS systems. Cloud solution providers meet businesses where they are—and grow with them as needed. For smaller businesses, this means they can bypass the significant capital investment required to implement physical payment systems that may be overkill. As a business grows, it simply pays for what it needs, making the entire payments operation more efficient.
By leveraging remote servers and software and gaining online access to resources, businesses are quickly able to achieve economies of scale that match those of larger companies. This, in turn, frees up internal resources to focus on the core business and delivering exceptional produces and services that delight customers. The “pay-as-you-go” model for payments can free up resources that can be funneled into core competencies of the business rather than maintaining IT infrastructure.
Perhaps most importantly, the security of cloud-based payments trumps that of traditional payments systems. Businesses face increasing scrutiny to keep payments safe, secure, and compliant. This is especially true as ecommerce payments rise and online threats expand.
Cloud-based payment systems are credited with being much more secure than their physical system counterparts. Most cloud providers provide additional security measure to keep data safe. This includes encryption, which changes large volumes of plain text data into cipher text via an algorithm. The data can only be decrypted using an encryption key.
Additionally, many cloud providers have special security certifications that ensure they are set up to handle and secure sensitive financial data. These providers are considered PCI DSS compliant and partnering with a cloud provider that is compliant can reduce scope for an organization.
Cloud-based payments systems are the future of payments. As the threat landscape becomes more complex, as the need for speed and convenience heighten, and as the demand for real-time insights increases, businesses will look to the cloud as a solution.
Cloud-based payments are inherently omnichannel, allowing businesses to enjoy a more integrated suite of point-of-sale and payments technology. The ability to accept traditional payments like credit and debit alongside emerging methods like Apple Pay will provide a competitive advantage to merchants who leverage the cloud.
The built-in security features that many cloud payments providers offer make a compelling case as well. In addition to reduced PCI scope, many offer comprehensive EMV software for liability protection. With the ability to control how data is protected—including both encryption and tokenization options—businesses have peace-of-mind that sensitive financial data remains secure and protected from hackers.
The ability to grow other revenue streams also becomes easier with cloud-based payments. For merchants that have loyalty, incentive, or rewards programs, these can easily be integrated into cloud-based payment systems.