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customer loyalty programs

Top Customer Loyalty Programs to Keep Them Coming Back in 2022

Having a good customer loyalty program in place is a very cost-effective strategy for retaining clients and increasing sales and referrals. A loyalty program is great at making companies’ products stickier and enhancing the likelihood of increasing customer lifetime value. Customer loyalty programs for small businesses also have the potential to reduce customer acquisition costs depending on the loyalty program that is implemented.

The crux of a customer loyalty program is that business owners realize that it is much more efficient to keep an existing customer than it is to acquire a new one. Due to this, businesses are already doing what they can to keep those clients by offering stellar products and a tremendous customer experience. 

Customer loyalty programs ideas are no longer limited to just airlines, gas stations, and grocery stores. Many different businesses are incentivized to offer a great product, supplement it with an outstanding customer experience, envision building that relationship for the long term and execute on that vision by incentivizing customers to continue using the companies product or service. 

There are several options for customer loyalty programs for small businesses which we’ll review in this article. We will also explain why good customer loyalty programs cannot survive on their own. They must be a companywide initiative in which Support, Sales, Product, and Management teams work in tandem to truly realize value from their loyalty program ideas and retain customers. Additionally, we will also highlight companies which are executing this strategy well.

What are customer loyalty programs for small businesses?

A loyalty program offered by businesses is a mechanism that rewards customers to shop with the business and to continue doing so over a long period of time. As a merchant, the aim of loyalty programs for small businesses is to have repeat business for a specific customer base that can also eventually serve as your advocates for referrals, testimonials, and a steady stream of profits. 

There are many ways to implement good customer loyalty programs and can include options such as referral programs, tiered plans of hierarchy to segment the most loyal, and strategies such as points-based loyalty initiatives. 

Companies have just started to take a wholesome customer experience strategic view in serving their clients. Yet, loyalty initiatives aren’t paid sufficient enough attention when building a relationship with those clients. 

Based on market research by the Harvard Business Review, the implementation of customer loyalty programs is accepting the fact that all clients are different. This acceptance allows for the maximization of income for the company while also offering the best value to customers based on their specific needs. This realization and resulting segmentation may require the company to allocate resources to both reward and build on that loyalty by offering concierge-level service. 

What makes for good customer loyalty programs?

There are several different loyalty program ideas that businesses can decide between. They all have their merits and should be all carefully assessed. Often merchants do not need to choose only one but can choose a combination of a few.

One of the greatest factors of good customer loyalty programs is not a loyalty program at all. It’s all about the customer experience. We are evolving towards being a hyper-social species that our ubiquitous technology is greatly facilitating. Today social media can help spread word of mouth across the globe in real-time. Our ability to differentiate right and wrong coupled with the tools to do something about it has not only accelerated corporate creativity but has also affected ownership changes. 

Just a little over a decade ago, it was sufficient to have a customer service desk and the differentiator was how much a company emphasized training in empathy, expertise, and timeliness. No longer!

Some of the most effective businesses executing the customer experience well are now bifurcating support roles from client onboarding and that of ongoing relationship building. Just as businesses did with the sales function decades ago. 

Someone must be dedicated to understanding the clients’ use cases and pain points. Who ensures what your clients’ true needs are? How many employees do they have (and potential users)? Are they all using your product? This is especially relevant at the beginning to ensure that there is sufficient utilization right from the start to emphasize value and stickiness. If not, what do your customers use your competitors for? What are the competitive displacement opportunities? 

The more your company answers these questions, the less research you need to implement your loyalty program ideas effectively. Personalization has a major impact on effectiveness, turning good customer loyalty programs into great ones. According to The Loyalty Report by Bond Brand Loyalty, efficient communication and personalization can increase the effectiveness of a loyalty program anywhere from 6.8 times to 10.1 times, depending on personalization of the right channel, place, time of day, and messaging. 

The importance of having loyalty programs for small businesses

Everyone loves a good deal. Over the past three decades, companies have introduced behavioral finance nudges to prompt customers to make more purchases and become repeat customers buyers. Those nudges usually include offering some form of discount available to every so often, usually around holidays or specific events, and encourage repeat shopping. A loyalty program basically combines both these elements and rewards longevity with a specific merchant or vendor. 

According to the 2019 Digital Transformation of Rewards, Rebates, and Loyalty report by FinTech platform Wirecard, more than half of those surveyed stated that a company with good customer loyalty programs was either “very” or “extremely” important to them when making both large and small daily purchase decisions. Only 8% of those surveyed said that loyalty programs had no influence in their decision-making. The report cited that 75% of customers are likely to make another purchase from a vendor that has offered them a loyalty reward or incentive. In fact, 45% of respondents made anywhere from one to three purchases influenced specifically by the loyalty program.

Such consumer sentiment and behavior have a significant impact to companies’ bottom line. According to Harvard Business Review, companies that incorporate good customer loyalty programs into their leadership and strategic mission operate differently, resulting in revenue growth 2.5 times faster than other companies in the same sector. 

Types of customer loyalty programs

Below are a few common examples of the different types of customer loyalty programs used by businesses.

Points-based system

A points-based system is a loyalty program is the most used among merchants. Basically, consumers are rewarded points based on the frequency and size of purchases made at a business. Customers can use these rewards points to redeem them for either discounts towards future purchases, free products, to level up to the next rung of the loyalty program or to qualify for specifically curated promotions. 

Spending program 

A spending program is a type of loyalty program that sets specific client spending targets based on data of prior spending history. Cash back offers are an example spending program. The more customers spend the more they earn in the loyalty program. Like the points-based system, the spending reward can be in the form of discounts, free products and giveaways, specific promotions, or the qualification of a raffle or other form of lottery offering.

Tiered Loyalty Program

A tiered loyalty program is one of the most coveted loyalty programs among consumers. The tiered loyalty program is a status-based program based on the spending patterns of a customer. An example of a spending program being implemented is certain clients being granted a bronze level based on X amount of dollar spending in a year by the customer. The customer can move up to silver status if the spending increases, entitling them to additional perks, or bragging rights. 

The brand must have some degree of scale and a following for a tiered loyalty program for all its benefits to work effectively. The idea of a tiered loyalty program is that every new level or tier offers additional exclusive and VIP benefits. Either those benefits are tremendous or the vendor offering them is ubiquitous and sought after. 

The American Express card is a perfect example of this. Amex has a card for all income thresholds and use cases. Starting with the American Express Green Card, all the way up to American Express Centurion. The annual fee for a Green Card is $150 a year, whereas it costs $5,000 for the black card, once you’ve paid a $10,000 application fee after having the privilege of being invited to apply for it. The black card is seen purely as a status symbol. Even the company’s own marketing material and website position it as such.

Of course, it is important to note that the company’s cards are its products. However, it has astutely embedded loyalty into the product. Every card mentions how long you’ve had the card with the ever so subtle ‘Member Since’. Plus, every new tier showers cardholders with additional rewards and benefits. 

A Hybrid Model

The hybrid loyalty program model combines various features of all the other loyalty options already mentioned. Merchants offering this option may utilize internal data to determine which loyalty program idea bests suits which consumer segment. For some it may be appropriate to offer certain discounts based on existing use case and understanding of certain clients. Others may be offered more curated experiences and deals.

The Community Model

There is another way to incentivize your customers to become more loyal to your product offering. Although there is no tangible financial gain from a community model, the benefits are still very real. There is a reason why Google Search is the equivalent of god to many people around the globe – it has all the answers. Often it presents the answer even before you ask! The questions have been asked, and the answers curated, repeatedly. All over the world. 

The Python programming language is one of the most used and learned programming languages available. It comes with millions of pre-built libraries of use cases from all industries and domains globally. 

WordPress is the most popular way to set up a website without any coding or technical expertise. Any question you may need an answer to, there are dedicated specialists of the system to help you through the problem. For free! There’s an overabundance of resources available if you wish to design additional customization into your website beyond the default templates available. Also, many for free, or at very minimal costs. 

All these platforms have one thing in common – a community. It is a location and time zone agnostic group of individuals sharing their experiences and expertise that draw in more users into the ecosystem and thereby becoming a self-sustaining growth model. 

Imagine having to replicate a Google search. It’s very hard to compete against a pre-existing community of likeminded individuals that a customer can rely on for advice, share qualms, air out grievances, and seek technical answers at any time they need to. It builds a degree of stickiness into your product and sells itself. 

Referral Programs

Referral programs are another great way to build loyalty among your client base. It’s hard to recommend a product to someone you’re not sure about yourself. A referral program offers discounts or other benefits for referring new customers to the business. Such programs are one of the most cost-efficient ways of acquiring new customers and have one of the highest level of conversations rates. A major reason driving this efficiency is that word of mouth from family and friends is the most reliable in influencing purchase decisions. 

Examples of good customer loyalty programs implemented by companies

There are many great examples of very well executed loyalty program ideas. Below are some of the following.

Amazon Prime

The retail industry has razor-thin margins because pricing is a major competitive force, especially at present given the current inflation environment. Amazon has multiple sources of revenue and has traditional invested in operations and infrastructure than pay attention to profitability. As a result, the company has been able to offer a very differentiated customer experience, based on their ease of use with their patented one-click ordering, to the convenience of being a one-stop shop for some many different people around the world. 

The company has a fee-based loyalty program called Amazon Prime that gives members free 2-day shipping, exclusive sales events such as the Prime Day sale, and a streaming service mushrooming in popularity.

Amazon Prime is ideal for all its perks, and it gives the company some breathing room by having a consistent stream of cashflow annually to use for investments in additional offerings and more streaming programs. 

The upfront cost of the program is part of the reason of its success. Members are fully vested in making the most of their annual fee. Prime users have an average spend of more than four times as much as non-Prime Amazon shoppers.

Starbucks Rewards

The Starbucks Rewards loyalty program is a case study of how launch a rewards program and implement a mobile app. A culmination of numerous rewards offerings combined into a single program and offered via a mobile app which allows users to seamlessly access the system and quickly pay for purchases without any card data entry. 

Starbucks offers stars as their loyalty points, and they must use the app to accumulate them. All the company’s data points on their most loyal customers are gathered from users’ smartphones into a centralized depository. The program is a treasure trove of transactional and behavioral data for Starbucks, giving it access to who purchases what, when, where and with how much frequency.

Conclusion

A good customer loyalty program is one of the best ways to scale a business by incentivizing your customers to stay loyal to your company for the long term. It is widely used in all types of industries, ranging from hotels to grocery chains. Budgets allocated to such initiatives can be more effective than marketing spend to gain new clients. Such strategies are best implemented with broader company missions such as focusing on the customer experience since they have similar outcomes, and building a long-term relationship with customers. 

Customer loyalty program ideas can also incorporate new product launches and even user acceptance research. The business already has access to vital consumer sentiment with existing customers, so that market share can be easily scaled to cross-sell or upsell via the backdrop of a customer loyalty program.

The mark of a good customer loyalty program are how effective they are at the company overall. Are different teams working cohesively to achieve a common goal? It’s pointless to build a great product but have terrible customer service that drives clients away. Similarly, if there’s no feedback loop established between the client, the support and success teams, and product development, loyalty program ideas are mere band-aids to much bigger problems.

Good customer loyalty programs have the potential to increase the customers lifetime value while simultaneously increasing the likelihood of referrals from the customer. All options should be carefully considered and should be customer centric. Consider A/B testing various loyalty program strategies and carefully evaluate the results of each implementation with clear KPIs to track in order to decide what moves the needle in a positive direction for you business.

7 Most Important Hotel KPIs in the Hospitality Industry

You need to evaluate data to know how your business is doing. That’s as true for the hospitality industry as it is for any other type of business. When it comes to hotels, there are particular metrics you can look to when measuring your performance. These are known as key performance indicators or KPIs.

This article will explain KPIs’ importance for the hotel industry. We’ll also go over the seven most important KPIs for the hospitality sector and the steps to make a KPI report of your own.

What Is a KPI?

Key performance indicators, or KPIs for short, are measurable values that show how a company or organization is doing about its objectives. For example, the average room rate shows how a company or organization is doing relative to its goals. Using KPIs, business owners and managers can see how their targets are met using data and calculations.

Key performance indicators cover all aspects of the hotel industry, from financial management to operations, along with all departments with measurable outcomes, such as marketing and front-of-house. For accurate data and metrics to improve performance, you need to choose KPIs relevant to the specific sector you’re working in.

What Is the Importance of KPIs?

Any industry needs to have a good record of previous performance, successes, and how these metrics relate to their goals. In the hospitality industry, KPI data is invaluable for analyzing and evaluating hotel performance.

By tracking KPI data, hotel owners can make informed decisions based on previous performance and use that data to understand the hotel’s trajectory clearly. Moreover, hotel data analytics give the business insight into various factors influencing performance.

KPIs provide hoteliers with valuable learning opportunities, as knowing your strengths and weaknesses can help maximize your property’s potential. Hoteliers can also use KPIs to gauge their progress and challenge themselves to move forward.

What Are the Different Types of KPIs in the Hospitality Industry?

Regarding the hospitality industry, the KPIs can be split into four categories: operational costs, financial performance, guest experience, and competitive benchmarking.

Let’s take a look at each:

Operational Costs

Hotel properties can improve their performance and profitability by using several operational KPIs. The more a hotel monitors these costs, the more it can increase profitability by reducing them.

Some examples include:

  • Energy management
  • Water consumption
  • Labor costs as % of sales
  • Employee performance

Financial Performance

Hotels must closely monitor several financial KPIs to ensure profitability is maximized. It is essential to monitor and analyze metrics such as total room sales, occupancy rates, and reservations in addition to total revenue.

Examples include:

  • Gross operating profit
  • Occupancy rate
  • Average daily rate
  • Average room rate
  • Revenue per available room
  • Net revenue per available room
  • Revenue per occupied room
  • Gross operating profit per available room
  • Cost per occupied room
  • Marketing ROI

Guest Experience

In addition to measuring a hotel’s financial KPIs, it’s crucial that they also track and measure their revenue-generating metrics. In other words, the guests. An organization’s guest experience KPIs are significant since they determine whether or not guests will become repeat customers. 

Some of these include:

  • Online rating
  • Customer satisfaction
  • Loyalty programs

Competition Benchmarking

To understand a hotel’s performance, it is critical to benchmark its performance against industry best metrics and the competition. You can compare the performance of your property with that of your competitors using competition benchmarking.

To measure your hotel’s performance, you can use several benchmarking KPIs. 

Examples include:

  • Average rate index
  • Market penetration index

What Are the Most Important KPIs for Hotels?

Although KPIs are crucial for measuring hotel performance, they are not equally impactful. In the hospitality industry, a few KPIs are more important than others.

To ensure your business’ success, keep track of these 7 KPIs:

  1. Average Daily Rate (ADR)

The ADR measures how much revenue you earn from renting a room for occupancy on a single day. The average rate per occupied room is one of the most important metrics because it allows you to determine the average amount of revenue collected daily for all the occupied rooms. To avoid unrepresentative figures, ADR always excludes unoccupied rooms.

This KPI measures an essential aspect of your hotel’s financial performance. Moreover, ADR plays a vital role in forecasting pricing and marketing. This way, management can plan and work with flexible prices according to the seasons.

Here’s how it works:

  • Room revenue / number of rooms sold (occupied) = ADR
  1. Average Length of Stay (ALOS)

Using this measure, you can determine the length of stay of guests by multiplying the number of occupied rooms by the number of bookings. Hotel guests are counted based on the number of nights they stay at the hotel when calculating the number of occupied spaces.

A hotel’s final score represents its clients’ average length of stay. Usually, a higher score indicates higher overall spending than a lower score.

You can use ALOS data to make pricing decisions. For example, if your ALOS is low, you could consider increasing your room rates for short stays or offering better deals for more extended stays. A hotel’s revenue is heavily influenced by the length of stay of its guests.

The calculation is as follows:

  • Total occupied room nights/number of bookings = ALOS
  1. Market Penetration Index (MPI)

MPI plays a vital role in measuring KPIs. In terms of the hospitality industry, this shows how your hotel compares to your competitors.

A score below 100 indicates you are doing poorly and below the market average. Alternatively, if your score exceeds 100, you perform better than most competitors.

Here’s how it works:

  • (Hotel occupancy % / market occupancy %) x 100 = MPI
  1. Occupancy Rate

If you want to track occupancy rates, you can do it daily, weekly, monthly, or annual. Measuring this metric involves counting the number of rooms, identifying the empty rooms, and identifying the booked rooms.

The occupancy rate is calculated by dividing occupied rooms by the total number of rooms available and multiplying by 100. Your hotel can use this KPI to evaluate its daily performance, giving you constant feedback. It may be a good idea to run promotions on certain days of the week if you notice lower occupancy or to streamline your staff if not every staff member is needed.

Here’s how it works:

  • (Number of occupied rooms/number of available rooms) x 100 = Occupancy rate
  1. Online Reviews
    Published reviews and feedback influence hotel bookings. Sites like Tripoto, TripAdvisor, or Make My Trip allow people to review properties, and they have pictures whichthatassist you in deciding whether to book the property. With everyone having access to the Internet and sharing their experiences about a hotel, it’s essential to read the reviews. 

Feedback and reviews on your hotel’s website can make or break your reputation, and you can show your customers that you care about what they think about your property by responding promptly to their negative reviews. Hotel guests’ star ratings can indicate how efficiently the hotel operates and where improvements can be made.

Ratings and reviews can help hoteliers improve customer satisfaction and attract new clients by making changes.

  1. Revenue per Available Room (RevPAR)
    RevPAR, or revenue per available room, is another metric for measuring the property’s performance in the hotel business. A hotel’s RevPAR metric helps evaluate its operational performance. A measure such as this can also serve as a coach for achieving future investment goals. The RevPAR of a hotel could serve as a productivity indicator for investors. It also indicates how much a hotel can charge and how successful it is at selling its available inventory.

Average revenue is calculated for a certain period (usually given as a daily average) based on your income across all bookings. This KPI is calculated by multiplying the average daily rate by the occupancy rate. You can also divide the revenue per room by the number of available rooms.

RevPAR calculates revenue per available room. Generally, a high RevPAR indicates a reasonable occupancy rate and a high average daily rate.

Here’s how it works:

(Average daily rate x occupancy rate or total revenue from night) / total number of rooms available = RevPAR

  1. RevPAR Room Type Index (ReRTI)

ReRTI was developed in response to changes in the hospitality landscape over the last few years. It helps revenue managers determine whether the sale of high-value rooms contributes proportionally to RevPAR.

ReRTI analyzes which room types are the most profitable and assesses whether free room upgrades can help or hinder a hotel. If the room scores higher than one, it contributes more than it should be based on your other rooms. If the score is below 1, the room is underperforming.

Here’s how it works:

(% total RevPAR x number of specific room types) / (% inventory x number of specific room type) = RevPar Room Type Index 

Making a KPI Report

Through KPI reports, business leaders can quickly and easily assess their organization’s performance about specific strategic goals. A modern KPI report makes all the underlying data accessible via interactive dashboards. A KPI report makes it easy to spot trends, recognize relationships, or identify outliers in data, even for non-technical users. As a result of these insights, better business results can be achieved.

Reports are usually where the analysis takes place. 

  • How are those KPI numbers calculated? 
  • Why do the data points fluctuate? 
  • Is there a reason for this? 

Historical data is used to answer these questions.

Types of KPI Reports

There are three different types of KPI reports that you can make based on what information you want to ascertain from your KPIs: analytical, operational, and strategic.

Analytical

The Analytical Report provides details behind the KPIs. It is possible to use them across all business areas. Reports like these are designed to answer questions arising from peaks and troughs in KPI data. Typically, static reports show historical values, while interactive reports display metrics dynamically, allowing users to investigate the data.

Operational

The primary focus of Operational Reports is the day-to-day activities of an organization. The information they provide helps those involved in those activities make decisions and take action. For example, in the hospitality industry, a report on occupancy rates can be used to determine if changes to the pricing are needed.

Strategic

Business strategic reports aim to provide a clear and meaningful picture of the health of the company and the direction in which it is heading. A company’s performance against goals and objectives is shown in these reports.

How to Create a KPI Report in 5 Steps

Creating a report isn’t difficult so long as you follow these simple steps:

  1. Create an overview

It can take the form of an outline document that answers the following questions about the report:

What is the report’s objective/goal?

Who will be the audience?

What will be the purpose of the Report? Is it operational or strategic? Is it static or interactive?

Is it going to be distributed soon?

  1. Define the KPIs

You’ll better understand your KPIs and metrics once you’ve established your overall objective. KPIs should answer questions such as, how well are sales performing compared with their goals? Does the company’s growth meet expectations? The tricky part of these KPIs is getting the data that fuels them. Is it currently available? Is it possible to automate it? How reliable is it? These are just a few of the questions you’ll need to answer.

  1. Present your KPIs

The information should be presented in the most straightforward way possible using charts/graphs and tabular data. Make sure the charts are relevant, focused, and in context. Maintain a logical flow of information by presenting your KPIs in a logical order.

  1. Build a prototype

Create a first draft, use dummy data (if there is none), and distribute this to colleagues and stakeholders. Help to encourage consensus by providing one point of feedback in the report itself.

  1. Refine and release 

Finalize and distribute the report. The efficiency of reports must be adjusted and evolved just like any business process. Keep information relevant and up-to-date by integrating regular reporting reviews and maintenance cycles.

Final Thoughts

Regardless of their industry, all businesses should keep track of their key performance indicators. Whether they are trying to make sure they can manage their operational costs, increase their profits, or find new revenue opportunities, KPIs are how businesses determine whether they are in line with their goals. For the hospitality industry, that means measuring the occupancy rate, customer reviews, average length of stay, and the revenue generated per room. Using this data, you can make informed decisions regarding your hotel’s future.

make money from home

The Best Opportunities to Make Money from Home in 2022

The past couple of years has presented a tremendous opportunity to explore various new ways to utilize one’s talents and make money from home. During that time, many have decided to use various social safety nets to quit their jobs and pursue their passions. Others, while given the opportunity to work from home for the first time in their careers have used their time saved from not having to commute or dress up for work and diverted it to side projects, also dubbed side hustles, or working as a part of the gig economy.

The phenomenon is rampant throughout the US today and is considered the best ways to make money at home. Astonishingly unheard of just a decade ago. These changes have impacted many other parts of our lives beyond how work is done. The ability to earn money by ridesharing has resulted in consumers’ deciding to delay the purchase of a car of their own. Many speculate that the trend to work from home allow many employees to explore other cities via Airbnb, thereby delaying settling down in any one area and purchasing a home. 

The opportunity to make money at home has had such a strong impact that workers worldwide have resigned from their traditional office-based roles in large droves. Maybe it was the pandemic that crystalized thought around how finite life is. Or it made people realize how much productive time anyone really has in life, and they should devout more of that time to what they like doing or a dream deferred. Many older workers, being the most at risk from the pandemic, decided early on to retire choosing to spend their time with their loved ones. On a darker note, for many it was the inability to work due to an illness exacerbated by delayed treatment since most healthcare industry resources were allocated to fighting the pandemic.

Whatever the reason was to resign, the trend was so significant it is colloquially referred to as “the Great Resignation.” Now, as inflation rears its ugly head once again after four decades, just as market, and the wealth effects it spawns, are hitting new lows. People are reassessing returning to work, but not the office. As people look for the best ways to make money at home, we explore some areas people can utilize the skills they already have to do exactly that.

Freelancing

As remote work has become the norm, freelancing has become one of the best ways to make money at home. Forbes call it a societal shift. According to a survey of employers conducted by freelancing platform Upwork, 59% of employer plan to hire remote workers in the next six months. That statistic goes up to 60%, for employers planning out human resources over the next two years. 

There are over 150 apps and platforms that allow for individuals to easily enter the gig economy, allowing them to make money at home. Remote work and freelancing today are still in their infancy, yet so commonplace that the sector is reminiscent of the development to workplace standards and rights codified during the 18th century. Today, key trends everyone is keeping an eye on are areas such as the expansion of freelancing to more sectors, having more platforms offer better pay, attracting more talent towards this mode of work, and offering more rights to workers of the gig economy.

Simultaneously, there is more acceptance among employers that are beginning to appreciate the benefits of allowing their employees to moonlight with side hustles. More are more companies are working with their employees to have appropriate disclosures in place so that they their primary job is prioritized and that there are no conflicts of interest. Furthermore, more employers are beginning to see the benefits associated with candidates who showcase their freelancing career in lieu of traditional work at a single company. 

Employees are likely to leave if the ability to work from home is eliminated. Inflexible policies around remote work are one of the biggest contributors of dissatisfaction among employees. According to Bureau of Labor Statistics, almost forty-eight million people quit their jobs in 2021, up 33% from a year earlier. These trends are likely to further grow are more employers are cognizant of the transformation of work that has been accelerated over the last two years. And patience is wearing thin for many employees about their employers’ dogmatic view of working from home, 56% are only willing wait one-two months for employers to align workplace values with theirs before deciding to quit.

Virtual Assistant

Virtual assistants are what executive assistants were in old days of work, available primarily for, as the name suggests, executives. However, that role has been expanded by the advent of remote work and freelancing. It is no longer the prerogative of an executive to have an assistant but for anyone that may need it. 

Today, many different people look to hire virtual assistants that can easily make money at home. Many different small business owners and even freelancers that manage multiple projects are recommended to have a virtual assistant to streamline workflows and administrative tasks.

The role has many meanings and different responsibilities depending on the industry of work. A virtual assistant for a YouTube v-logger may be responsible for managing various members such as script writers, video publishers, social medial planners, while also overseeing other tasks such as arranging interviews, collaborations, etc. Whereas a virtual assistant for a writer may be tasked with proofreading, vetting calls, reaching out to publishers, managing appointments, among other responsibilities.

Tutor

Tutoring is a growing field. It is one more area of work that is one of the best ways to make money from home as the sector transforms towards the digital, especially after students all over the world were unable to attend school or could only attend virtually. 

Furthermore, demand of specific services cross national borders. Who better to help a child learn English and learn the proper colloquialism than someone from western countries? You don’t even have to be a teacher, just be able to help a student become a better, western-styled conversationalist. Apps such as Cambly are great options to help one get started with such services. 

Throughout the developing world, academic success, and the ability to get into top universities is akin to career success. As such, demand for after-school programs, private tutoring, and other development skills that give students the leg up is extremely valuable in countries such as China and India. After the Chinese government banned “for-profit” private education centers earlier this year, many publicly listed educational institutions focusing solely on that took a massive financial hit. However, these changes can help individual tutors who wish to offer their services to fill the void left by such entities. 

Online platforms such as VIPKid and Tutor.com are great platforms to offer tutoring services. However, it is important that you only offer your tutoring services in areas in which you have domain expertise. The end-goal is to offer optimal customer experience to have repeat customers and referral opportunities to continue making money from home.

Childcare

Old-fashioned childcare is one of the oldest and best ways to make money from home. Babysitting or broader childcare is very niche and in very high demand. Parents are often in need of someone who can watch over their children and have a broad range of experiences, ranging from various extracurricular activities, feeding, helping with homework. Anyone taking care of kids already has a great leg up on the competition. There are reports that babysitters are paid $35 per hour in some parts of the country due to a shortage of skill staff as well as an overall shortage of people willing to offer this service.

There is also freedom on what type of service you want to offer and how much time you’d like to dedicate to this service. Working parents can be targeted for all-day services, offering parents a full eight to nine hour childcare shifts. Alternative, you can target those parents that need assistance in after-school childcare or programs. Another service offering can be for parent’s date nights, so hours such as Friday evenings and weekends can also be offered to accommodate parents. These services can be combined at the childcare service.

At the end of the day, it is an actual business you’re starting to make money at home. Your time and services should be priced appropriately. Market research can easily be conducted by looking at what are charges of the services you plan to offer at similar childcare centers in your area. You must be careful to not underprice yourself, otherwise you’re faced with an influx of clients that you may not be able to serve to the best of your abilities. 

The best way to make money at home with childcare services is to start with what you’re looking to earn and add onto that all the additional costs you’re likely to incur in running your business. You should be realistic on how much workload you can handle and if you may need to hire additional help. That can help you assess what you can charge per child every day. 

Sell creative work

It has never been easier to make money from home by selling your creative work. This could include the photos you’ve taken, works of art, both physical and digital, and can even include your expertise in graphic design, whether that includes the selling of logos and corporate personas or involves the use of specific software, such as Adobe Illustrator or AutoCAD, to name a few.

There have been numerous platforms that have proliferated people tap into their creative side to build and sell products. You no longer need vast amounts warehouses and logistical expertise to create and sell your creative work. Platforms such as Shopify and Etsy are marketplaces that manage all of that and can offer expertise and advice on how to start up and manage your business from the comfort of your own home with limited startup costs. 

Of course, these sites and marketplaces have their rules are take a portion of your sales. Creators don’t have to be specific to a specific site, your loyalty should rest only in your own offering. As such, it is best to slowly transition your business towards your own website. Although you may no longer have the expertise, integrations, and traffic of a large platform, it is expected that as your clientele builds, you may not need that anymore. Then you work truly by your own rules, and you get to keep 100% of your sales. 

Consulting

Starting up a consultancy is another great option to make money at home. It is a great way to offer your professional expertise while you’re taking time off from work for whatever reason but simultaneously keeping your skills up to date and your mind sharp. 


More and more professionals feel stifled by traditional office cultures requiring work from office or synchronous nine-to-five work. As more professionals exit the traditional workforce, they are choosing to remain active by offering their expertise on an ad-hoc basis. Many set up a more professional LinkedIn profile, or even their own website to showcase their full breadth of expertise and portfolio of work. 

Consultancy work is a broad topic. It could include work such as mentoring other professionals that are still starting out in their careers or are relatively new in the next rung of their corporate ladder. 

Advisory is another form of consultancy that is often needed. Simply because one is retired, does not mean they have no way of continuously contributing to teams. Leading nonprofit organizations and conducting fund raising activities have often been a tremendous use of skill of retired executives and bankers who expertise with finances and a vast network to assist with financing needs.

Many times, many professionals simply decide to continue utilizing their skills while also sharing their knowledge with a broader audience, often done with virtual classes. There has been tremendous opportunity for online classes offered via MOOCs, massive open online classes, in the past decade. Now even more entrants are looking to offer more focused and curated educational experiences.

Consultancies doesn’t necessarily mean it is for the retired or those looking to escape the regular nine-to-five. It is also a great method to transition into a new role. Very few people are comfortable leaving a role without understanding a new role to step into. Sometimes they may want to switch occupations or industries and either consulting or freelancing in those roles and sectors is a great with try them out and build expertise in advance before taking the leap.

Conclusion

The trend to make money from home has exploded over the past few years. Large cohorts of all age groups and income levels have decided to pursue personal passions are choose not to work at all, feeling comfortable with the savings they’ve built. Today, nearly half of all full-time employees in the US work from home. Almost two-third of American office employees work from home for some or all their work week. 

Numerous opportunities are popping up to make money from home, ranging from freelancing, virtual assistance, tutoring, childcare, offering one’s expertise as consultancies, or offering one’s own creative handywork. There are so many new ways to make money at home. In fact, there are over 100 different apps and platforms that accommodate people throughout the world to make money from home. 

Surprisingly, many of these platforms did not exist just a decade ago. It’s a classic chicken and egg scenario. Which came first, the demand for these platforms and services that have shifted employee behavior and trends. Or was it that the demand for these services always existed and spawned these numerous service providers in a multitude of industries. 

The answer to both is yes. Many freelancing platforms existed and have permeated for well over a decade. Language teaching and practicing weren’t always available via a platform but there were always schools that existed to offer those services which hired teachers to moonlight for them. It was the pandemic that locked everyone into their homes, that let technology bring those services to the doorstep allowing people to spend and make money from home.

All these changes and shifts in the dynamic of work are all the more relevant today. Many who have considered retirement or have retired or left the workforce entirely over the past couple of years are reevaluating their decisions. The stock market isn’t setting new highs anymore, but inflation is. Rising interest rates and energy prices are seeping away at savings and nullifying higher wage increases. However, employees are increasingly questioning the need to return to the office. If it can be done during the pandemic without any loss of productivity, why can’t everyone continue to work and make money at home! The questions is, are you aware of the best opportunities to make money from home in 2022?

biggest credit card scams

Biggest Credit Card Scams in 2023

Scams have been a common evil in the credit card industry since the payment method was invented. However, with the evolution of technology and the adoption of more robust security methods, scammers have resorted to more devious techniques to get ahold of your information.

To protect yourself against credit card scams in 2023, you must be aware of these methods and how to combat them.

This article will identify the most common credit card scam methods and reveal the steps to follow if you are taken advantage of by a scam.

Credit Card Scams

6 Common Credit Card Scams to Look Out for in 2023

You can encounter many types of scams, but these six are ones you should always watch out for:

The Charity Scam

One of the most challenging scams to recognize is the charity donation scam. You will receive a phone call from someone claiming to be from a charity, explaining why your donation is needed and asking for a payment, which is when your credit card information is stolen.

Avoiding charity scams

Never share your credit card information with an unknown individual or institution, even if they seem legitimate. Take note of any information they provide you, then politely hang up. Look up the phone number on the Internet, putting quotation marks around it. There is a good chance that the number that called you has already been identified as a scam caller. You can donate directly through the website of a legitimate charity if you wish to help.

The Hotspot Scam

Public Wi-Fi networks should be used cautiously since scammers could monitor them. There are times, however, when the network itself is a trap, carefully crafted by credit card scammers.

When you connect to a “public Wi-Fi hotspot” on your smartphone or laptop, you are asked for credit card information in this credit card scam. The hotspot is fake, and the scammers get your credit card information directly. Other times, the hotspot offers internet access for free, but scammers monitor your every move. The hackers record your passwords, peek into your bank account when you check it, and capture your data.

Avoiding hotspot scams

Ask an employee for the correct network name and password if you need to access public Wi-Fi at a restaurant or store. Avoid logging into your bank account or providing sensitive information if you can. Avoid generic-sounding names like “Free Public Wi-Fi.”

The Credit Card ‘Sign-Up Farm’ Scam

Credit card scam victims are often willing participants, lured by the promise of easy money if they help generate what they believe to be legitimate rewards. This scam is designed to rip off card issuers on a large scale.

People who run these scams recruit people with good credit and offer to pay them for using their Social Security numbers to open credit cards. Scammers rack up huge card balances, convert the points to cash, and cancel purchases. Sometimes they don’t bother canceling, leaving the victim on the hook.

Payments of $1,000 to $10,000 are typically promised to victims for their information, although some never receive them. In addition, they are told that the card spending is legitimate, even though the whole point is to defraud the issuer. The victims can be liable for huge balances, have their credit ruined, and have their credit cards and airline rewards frozen.

Credit Card Scams - 'Sign-Up Farm' Scam

Avoiding the scam of signing up for a farm

Those struggling financially may find it hard to resist the lure of easy money. However, one should assume that easy money does not exist.

To avoid credit card farming scams, never share your Social Security number or any other personally identifiable information. You can check your credit report for free to ensure no one is using your identity to open accounts without your knowledge.

The Interest Rate Scam

It is common these days to receive robocalls. Interest rate reduction scams are a type of call that is becoming increasingly common. They involve an unknown number calling you with a recorded message claiming you can negotiate your credit card interest rates to dramatically lower them. However, this is not true.

As a result, they claim they have relationships with credit card companies and can lower your interest rate and reduce your payments by thousands of dollars. As soon as they get your attention, they’ll ask for your credit card and personal information. 

Avoiding the interest rate scam

Contact your credit card company directly if you want to reduce your interest rate. They are the ones who can give you the proper answer on whether this could happen. It would be best if you hung up on anyone who makes a similar promise.

The Overcharge Scam

Credit card overcharge scams are rising because we continue moving away from cash and in-person transactions to credit card swiping and online shopping. With this scam, someone will contact you, claiming that an overcharge was made on your credit card on a recent purchase, either via text or call. The caller will attempt to solicit your personal information through a series of questions.

According to the Better Business Bureau, the scammers usually address their victims by name in this scam. Since credit card purchases are prevalent, the recent purchase line doesn’t sound unreasonable to most people.

Avoiding the overcharge scam

Don’t give out sensitive personal information over the phone. Put the phone down. Pay attention to your credit card statement. Call the number on the back of your credit card if something seems amiss.

The Skim Scam

Skimming has remained relevant as a popular credit card scam as more businesses go cashless and more consumers pay with credit or debit cards.

When you insert your card at a gas pump, ATM, or other location, a skimmer reads the information from the stripe of your card, which is an electronic device. By capturing that information, the person who set up the device can use or sell your credit card information.

Avoiding the skim scam

Before inserting your credit card, inspect the reader for any tampering before inserting your card, or start using a mobile wallet (which connects your credit card and then allows you to pay with your phone). 

What to Do If You Fall for a Scam?

Awareness of the different scam methods and avoiding them is essential for protecting yourself, but sometimes you can fall for a scam even if you know what to expect. If you recently found yourself the victim of a scam, follow these steps:

Contact Your Bank

Contact your bank or credit card company and ask them to freeze the compromised account. Financial institutions’ security protocols usually protect credit funds. You must provide extra verification to regain control of a compromised account.

Freeze Your Credit and Contact the Credit Bureaus

Placing a fraud alert with the three major credit bureaus (Experian, Equifax, and TransUnion) will limit any potential impact on your credit score and credit profile. These credit bureaus also provide detection and prevention of future identity theft attempts. 

The following numbers can be used to reach them: 

  • Call Equifax at 1-800-525-6285
  • Contact Experian at 1-888-397-3742
  • Call TransUnion at 1-800-680-7289

Get a Free Credit Report

You can obtain your credit report by contacting the credit bureaus, which you should review to check for any suspicious activity that could indicate further fraud. 

Notify the credit bureau if your account information changes, a new credit card application is submitted, a new card is received, or a loan request is made. 

AnnualCreditReport.com also offers free credit reports. 

Sign up for credit monitoring if you notice any suspicious activity on your credit file or accounts.

Report the Scam to the FTC

File a police report with your local police department and report the fraud to the FTC. In addition to helping law enforcement track down scammers, reporting fraud helps protect others from falling victim to scams in the future. 

  • Visit this website to report fraud to the FTC: https://reportfraud.ftc.gov/
  • Contact the FTC at 1-877-ID-THEFT (1-877-438-4338) for additional assistance.

You should also report the fraud wherever your card was used. It is often possible to stop unauthorized charges from being made by fraud departments at many companies.

Change Your Passwords

To prevent further unapproved use of your credit card, you should change all your passwords. A single compromised login can allow fraudsters to access multiple accounts, so you should change your passwords immediately. The use of a password manager can improve your security.

Dispute Any Charges

As a result of The Fair Billing Act, consumers are protected from the financial ramifications of harmful credit card scams. Upon securing your accounts, you will be able to seek reimbursement. Chargebacks can be initiated against fraudulent credit card payments by contacting the affected companies. 

Final Thoughts

One of the best ways to protect yourself from scams is to understand how they work and how they choose their victims. If you ever get contacted by someone claiming there’s an uncommon purchase, verify the contact number and call your bank yourself instead. Checking your statements often for signs of malicious activity is also a good idea.

best customer service software

Best Customer Service Software Tools in 2025

Customer service standards are evolving because customers desire more transparency and quicker responses. Every company wants to make sure that its people are ready because these new demands may also bring forth new challenges. 

Therefore, you must utilize cutting-edge customer service software to match the high client expectations. By utilizing cutting-edge technology like VR, AI, and others, you can change the customer experience.

Finding the best customer service tools is difficult today in our technology-driven society. Not because the possibilities are constrained. The availability of so many different kinds and varieties of customer service programs makes it possible for you to become confused, which is the exact opposite of what is meant. 

This article aims to guide businesses toward the most effective strategies for improving the customer experience in 2025. So, let’s get started. 

What Is Customer Service Software?

Any software used by a business to aid customers who purchase or utilize its products can be referred to as customer service software.

The most fundamental function of customer service software is to offer a centralized database, known as a ticketing system, where support agents may track, prioritize, oversee, reply to, and settle numerous employee or customer requests. Any tool that assists in delivering customer service can also be considered customer service software. 

In most cases, businesses employ customer service software to enable quicker, more effective customer support offered by numerous customer service agents, all utilizing the same tool. 

Types of Customer Service Software

A company’s employees may receive internal customer service, which supports them, or external customer service, which supports those who purchase or use the company’s goods or services. Each customer care method is typically seen as a distinct kind of customer service. Here are some examples of different customer service software types that you can look at before selecting the best one for you. 

Live chat

With the use of live chat software, customer service representatives may address problems in real-time from the homepage of your website or a mobile app, for example.

This enables a company to take the initiative and address a problem before it even arises. For instance, an online retailer might provide live chat on its checkout page to address frequently asked questions before a shopper abandons their cart.

Additionally, live chat helps a business to provide support whenever customers need it. Chatbots can handle customer requests in place of your representatives while they’re busy being humans. 

Help desk

One of the first pieces of software teams often purchase is help desk software. It aids in centralizing all your customer service-related activities and depending on the technology. It can manage support requests from numerous channels like email, live chat, social media, and phone.

The primary role of help desk software is to manage and organize customer interactions so as to enhance both the customer and agent experience. 

Shared inbox

Email tools like shared inbox software let several users access and reply to emails sent to a single address. For the purpose of efficiently managing client conversations, further organization and automation functions are generally also added.

You might now be thinking that this tool accurately describes help desk software. You may be right. Shared inbox software is comparable to a stripped-down (lite) version of help desk software because it typically concentrates just on email exchanges rather than the numerous channels that a help desk may offer. 

Phone support

For complex problems, the best way to resolve a customer’s issue is still over the phone. Thanks to the unique qualities of a phone call, such as a human voice, it can occasionally be even more effective than lengthy email exchanges or in-person conversations.

Call center software gives customer care professionals access to tools like call records, automatic ticket creation, efficient internal routing, and access to the complete client history, allowing them to be more strategic. 

Messaging app

The manner that individuals communicate has evolved as a result of messaging platforms like WhatsApp, Facebook Messenger, and Apple Business Chat.

Customer service now incorporates that convenience factor. Customers can contact customer support representatives through the same messaging services they use to talk to their friends and relatives.

The advantage of adopting customer service software to interact via message channels is the ability to keep dialogues and information in a centralized location. When resolving a customer’s issue, if a message is sent first and subsequently a phone call is required, all of that information is recorded in the same support ticket. 

Knowledge base

Self-service material can be created, stored, arranged, managed, and shared with an audience using knowledge base software. Common types of content stored in a knowledge base include how-to articles, FAQ pages, and video tutorials.

There are primarily two kinds of knowledge bases: internal and external. As opposed to an external knowledge base, which is open to everyone, an internal knowledge base has private content that may require users to log in before they can access it.

CRM

Businesses can monitor and keep track of customer interactions with customer relationship management (CRM) software. Although it is most usually connected to sales, there are certain customer success applications as well.

Personalization is the main method that can support customer success. Depending on where each customer is in their customer journey, you may be able to predict demands better and build a unique experience with the help of the data you’ve collected. 

Standard Features of Customer Service Software

While various customer service software may offer various tools, most of them generally offer the following core features: 

  1. Ticketing System

A well-designed ticketing system is the key component of customer service software. Through the use of ticketing systems, your customer service staff can categorize customer inquiries, complaints, and interactions into individual “tickets” that can subsequently be allocated to and handled.

PLease note that help-desk software and ticketing systems serve the same function, and they are sometimes referred to as one and the same. 

  1. Inbox Support

A shared inbox for email management and support is one of the most important features of customer service software. Communications from different channels, intake preferences, and departments can be consolidated in a centralized location using an all-in-one inbox.

  1. Self-Service or FAQs

Not all customer service issues require a full ticket or a customer service representative’s time. Customers can easily access the information they require without setting up a meeting or waiting for a representative to become available by using self-service portals and/or FAQ sections. These features also give your reps more time to work on complicated cases.

  1. Shared Project Management

Using project management software, your entire team can collaborate and track projects. Project management ensures that everyone is always informed of the progress of project tasks and prevents double responses (much like inbox support).

Additionally, you can engage with project-related clients using shared project management and grant them access to deliverables.

  1. Live Communication

Any customer support software must have real-time communication tools. Live chatbots should be a minimal requirement for live communication, but many also come with phones, video, and webinar options.

Additionally, these features need to offer integration options, chat transcript access, call and video call logging, and real-time communication analytics.

Key Benefits of Using Customer Service Software

Companies of all sizes and types can benefit from customer service platforms. Utilizing a specific customer service system enables you to boost customer loyalty by improving the customer experience. These are the primary means by which it makes those experiences possible.

Agents can easily do their job

With the appropriate tools, your customer service representatives will work harder and be more engaged. They can quickly get the pertinent data about a customer for prompt assistance. For instance, if a customer has a question about their outstanding bills, the sales representative can easily access your centralized accounting software and look up payment information. 

Drives modern marketing strategies

All current marketing techniques are driven by accurate customer data. For instance, account-based marketing cannot be used unless you have access to relevant and updated customer information.

And that’s where customer service software is put to use. The software can gather client information from several sources and compress it for use on a platform (such as calls, social media, etc.).

This data assists sales and marketing teams in developing effective tactics to offer clients a personalized experience, thus increasing satisfaction. 

Offers self-service options

Companies can create a platform for customer self-service using customer support software. On their website, they can post knowledge bases that users can visit to find key information. As a result, it is predicted that by 2022, 70% of white-collar workers will interact with chatbots. 

Easily track performances

Traditional spreadsheets will only give you a limited amount of information if you want to monitor the effectiveness of your customer support team. You won’t be able to see which staff has handled more complaints recently or how long it took them to settle each one.

You can only get detailed information about your customer support team using customer support software. You can create real-time performance reports with the software to learn how your customer service department is performing and what modifications are needed. 

The 10 Best Customer Service Software Tools in 2025

We’ve put together this list of the top 10 customer service software applications to give you a head start in your search for the support tool that’s suitable for your team. 

  1. Freshdesk

Freshdesk is an omnichannel customer support software that aids companies in better customer engagement. Through the platform, customer support agents can contact clients using their preferred channel and streamline the customer experience.

Streamlined ticket management is one of the most significant factors of Freshdesk. The software has an integrated Team Inbox where teams may handle incoming support tickets from various channels. 

  1. Zendesk

Zendesk is a support tool that’s used to manage customer conversations. You can manage interactions on Facebook, Twitter, and email with any Zendesk plan. You can also manage phone and online conversations if you purchase one of their more expensive subscriptions.

Due to the relative complexity of the product, the resources required for initial setup, and the overall cost, Zendesk is typically associated with larger teams. However, they do offer a few more affordable plans. 

  1. Help Scout

Help Scout is committed to giving your customers and support agents a wonderful experience. Customers can get in touch with you from whichever location suits them best, and your team can collaborate on a single support queue containing all of your client’s requests.

Furthermore, you can produce information for your clients’ self-service with Help Scout’s knowledge base offering called Docs. Then, you may utilize the shared inbox’s knowledge base search feature to provide clients links to articles that address their questions promptly. 

  1. HubSpot Service Hub

The HubSpot Service Hub is a platform for expanding companies. If you frequently lose customer email correspondence, this software can help you organize it. It is a user-friendly tool with integrated CRM support.

The ticketing system from HubSpot makes it simple to log, monitor, and arrange customer complaints in a dashboard. You may track important support metrics using it, including the number of tickets, the speed of agent responses, etc.

You can also prioritize tickets to fix urgent problems quickly. Overall, it is a comprehensive customer service tool to employ in 2025. 

  1. Hootsuite

Spending money on a tool designed for social interactions today makes sense. When it comes to managing social media, there are several software choices. However, one of the best customer service software available is Hootsuite.

It offers an incredible dashboard you can personalize for your business and share views with teams. Filtering for various keywords, hashtags, and places is another option that lets you stay up to date on what customers are saying. 

  1. Jira Service Desk

Jira Service Desk is one of the platforms that are more widely used for help desk and service desk features. Businesses may quickly build up effective service desks using the software to help agents quickly resolve client concerns and guarantee that requests are appropriately categorized and prioritized. Additionally, the platform improves communication across several departments, including operations and customer service, as well as between IT teams. 

  1. LiveAgent

LiveAgent streamlines team productivity by combining communication from calls, emails, and social media into a single dashboard. It also offers easy setup and connection with the rest of their tools.

The gamification of customer service is what distinguishes LiveAgent from all the other tools so far discussed. Customer service can be made enjoyable for your team by allowing teams to earn points and incentives for tasks completed. 

  1. Vivantio

This is another tool for customer support that is primarily focused on IT service management. A versatile service management solution, the Vivantio platform is made to enable teams to deliver the best possible customer service while enhancing the customer experience. The platform offers self-service, incident management, business intelligence services, and service automation to assist organizations in achieving these objectives.

  1. Zoho Desk

A shared inbox, phone integration, and chat are just a few of the services that Zoho Desk offers. Some of those features, like chat, are only available with the most expensive subscription.

To interact with the rest of your tech stack, Zoho Desk also offers a broad range of connections. There are team management tools available, including time tracking, for larger teams. They also provide AI options for self-service, albeit this function is only available with the most expensive package. 

  1. Hiver

Hiver is a help desk for customer service created especially for Google Workspace. Hiver broadens your business’s current Google Office programs with features like analytics, shared inboxes, and SLA instead of switching to a new platform entirely.

Hiver has fewer features than the other customer support software because it is designed for businesses that do not want to rewrite their existing Google communications.

How to Choose the Right Customer Service Software

In light of this, which customer service software is ideal for your company’s requirements? By answering this question, you equip yourself with some tools for choosing the ideal product or, more often, the combination of products. Here are some pointers that could be useful to you: 

  • Understand what you’re trying to do. Are you creating a high-touch, customized customer service experience for a niche market or a high-volume, quick-turnaround retail business? Different software options are suitable for various situations.
  • Assess your resources. A team of one or two cannot continuously monitor every support channel. Additionally, there is little point in considering the more expensive tools if your budget is tight.
  • Know what features are essential. Does it have to work with a current tool in order for this software to run? Do you need a messaging system, or is it not necessary? You can reduce your options by doing that. 
  • Evaluate your favorites. Now that you have narrowed your choices down, you can evaluate them thoroughly. You might check out their customer service or speak with previous clients. 
  • Time to test the software: The easiest method of determining whether the customer service software will work for you is to test it out. So, it’s time to give it a try. 

Wrap Up

Most tools on this list have features in common, such as ticket management, self-service portals, and streamlined collaboration and communications. While many of these tools are applicable to standard customer service requirements, some support more technical workflows like asset management and change management. It all comes down to choosing a customer service software that perfectly suits the unique needs of your business.

Customer Support vs. Customer Service

Customer Support vs. Customer Service

Understanding “Customer Support vs. Customer Service” is essential for businesses striving to enhance customer interactions and ensure a positive brand experience. While both domains aim to satisfy and retain customers, understanding their distinct roles and functions can significantly impact a company’s approach to handling inquiries, solving problems, and fostering loyalty. Customer support addresses issues and technical concerns, providing immediate solutions and assistance. In contrast, customer service encompasses a broader spectrum of customer care, including building relationships, offering guidance, and ensuring overall satisfaction. Businesses can optimize their customer engagement strategies and drive success by delineating the differences and synergies between these two crucial areas.

What Is Customer Service?

effective customer service

Customer service is a catch-all phrase that refers to all of your company’s contacts with its clients. It is all you do to satisfy your customers’ expectations and enhance their overall experience. Customer service is a feature of almost any organization.

Ensuring your clients receive extraordinary value from your product or service is the ultimate goal of excellent customer service. Additionally, it is a minefield of potential pitfalls for companies with disorganized customer service teams and inflexible phone infrastructure. Customer service is an ongoing process that starts when a potential customer expresses interest in your company and continues long after they’ve made a transaction. 

Responsibilities of customer service agents

At every point of the customer life cycle, customer service representatives are available to assist and delight clients. That could be providing a customer with guidance on avoiding unforeseen problems or reactively assisting them in solving a common issue.

Some of the typical customer service tasks include the following:

  • Assisting clients with billing and delivery concerns
  • Resolving issues with non-technical accounts
  • Suggesting the use of improved equipment and methods
  • Gathering client comments and reviews
  • Onboarding new clients
  • Responding to inquiries and comments on social media 

Customer service representatives know the company, its offerings, and customer interaction methods. Even though they lack specialized knowledge, they can respond to general inquiries and direct clients toward more knowledgeable assistance.

Sharp, soft skills are also crucial for providing excellent customer service. The most outstanding customer service representatives are attentive to the customer’s specific needs, patient, sympathetic, helpful, and straightforward. 

What Is Customer Support?

Customer Support

The goal of customer support, a subset of customer service, is to assist consumers in resolving any technical issues that may arise while using your product or service. The majority of customer support interactions are reactive and brief.

Typically, a customer contacts customer support with a problem they need assistance with, and the customer support representative offers a solution. The agent will then instruct the customer on resolving the issue, or the support staff may choose to apply this solution themselves.

Most customer support is found in SaaS (software as a service), IT, or eCommerce companies. Furthermore, not all businesses require customer service. While restaurants value customer service highly, they typically do not provide or need customer support because their patrons do not need technical assistance. 

Customer support agent responsibilities

Customer support staff are available to respond to users’ issues promptly and accurately. Support personnel are constantly exposed to client problems, which allows them to give product development teams insightful user input.

Support agents are expected to perform the following duties:

  • Creating support materials and product documentation
  • Performing usability tests
  • Assist clients with product or service installation, maintenance, disposal, and upgrades.
  • Real-time customer support via live chat and support emails

The skills of a top-notch support representative include technical proficiency, product knowledge, and speed. However, support staff members should have the same empathy and interpersonal abilities as customer service staff to provide the best experience for consumers.

Comparing Customer Support vs. Customer Service

best customer service software

It is evident that while customer support and service are distinct, they are intimately intertwined. Customer support is more narrowly focused on giving customers technical support. In contrast, customer service deals with the overall customer experience and a little more customer participation to satisfy customers throughout their journey with your business. 

The following are some significant variations:

  • Consumer support mainly applies to any technical issues a customer may encounter while using a product or service, whereas customer service covers the entire customer lifecycle.
  • A support agent is a specialist, as opposed to a customer service person who is a generalist.
  • While customer support is typically reactive, customer service is proactive and proactive.
  • Customer service is more long-term than customer support, which is short-term.
  • All companies must provide customer service, but not everyone requires customer support.
  • Support isn’t always a part of customer service, but customer service is always about customer service.

Consider a consumer who enters a store searching for yellow jeans to illuminate the distinction between the two further. This customer may be assisted in finding the jeans and charged for them, and a customer service agent could package the jeans for them. They might even create an upsell by recommending a T-shirt that would go well with the pants.

In this case, the customer has everything they need, but there is no extra input or data into the experience; it is just transactional.

Consider a client who contacts Dropbox via email to complain about a problem sharing a file with a friend. The customer service representative: 

  • Directly links clients to their created documentation and guides them through the necessary processes.
  • Sort the discussion into categories to make it easier for the product team to receive input on the share function.
  • Initiates a dialogue about enhancing sharing
  • Follow up with the client to discuss how to make their experience better

The role of a customer support agent is more about improving the customer experience than transacting with the client. Customer support specialists use customer service skills; however, that is just one aspect of their work.

Customer support teams frequently work closely with the product team and are included in discussions regarding product decisions. Support teams are typically more active in the customer experience than customer service teams.  

Tips for Delivering Excellent Customer Support and Service

Understanding how to deliver excellent support and service your customers will value is crucial since it significantly impacts how organizations grow.

The following tips will point you in the correct direction:

  1. Give your agents the tools they need

Giving your team the proper tools gives them more time to serve and support your clients in the best possible ways. High-quality support tools simplify the lives of customers and agents and convey the impression that your business is conducted professionally.

For instance, providing omnichannel customer support allows your clients to contact you via the channel that fits them, whether live chat, phone, email, or social media. 

Based on their experiences with your company across various channels, each customer’s profile develops a rich picture of that client, providing any agent dealing with that customer with a quick overview of that customer’s history and wants. Customers are also spared the hassle of repeating themselves to numerous agents, and agents can resolve issues more rapidly.

  1. Communicate clearly

Clarity is essential when communicating with clients since ambiguous language breeds misunderstandings and avoidable errors. If you don’t communicate with customers clearly, you risk making errors undermining their trust in your company.

Removing any industry terminology and communicating without technical jargon will help to reduce miscommunication. Instead, use plain language that anybody can understand. And when communicating with customers, avoid confusing them with too much information at once. Additionally, transparency is a crucial component of good communication. When a customer asks you a question, and you are unsure of the answer, be honest with them and promise to get back to them as soon as possible. 

  1. Define your philosophy and process

You should establish your strategy for providing support and customer service. Without a consistent approach, your customer service delivery will be disorganized and inconsistent.

To build up ideas that you wish to influence your company’s customer service interactions, such as speed, proactivity, and accessibility, start by defining your customer service principles and philosophy.

A customer care playbook that lists your team’s standard procedures and top ideas might also be written. That will include standards for recording client feedback and guidance for techniques like reporting problems and issues, when to develop support content, and how to do so. 

  1. Close conversations properly

Up to 91 percent of unhappy consumers won’t complain about poor customer service; they’ll just leave. Because of this, your customer support and service teams need to resolve all customer interactions satisfactorily. You can’t determine if a customer had a positive or negative experience unless you ensure they are happy with the exchange.

Always inquire if there is anything you can do to assist a customer when the discussion seems to be lagging. This shows the client that you want to resolve the problem and are willing to go above and beyond to ensure their happiness.

When a client confirms that they are finished and have no additional inquiries, you can end the conversation knowing they were happy with the interaction.

  1. Utilize positive language

Customers should not just comprehend your explanations and directions; you also want them to feel encouraged and driven to complete their goals. Speaking positively means focusing on solutions rather than problems. 

  1. Prioritize the first point of contact

Customers want their issues resolved quickly when contacting support or customer service. If problems are fixed the first time they arise, up to 65 percent of return complaints can be avoided. Therefore, it is crucial to prioritize first-contact or first-call resolution. 

  1. Demonstrate empathy

Awareness of customers’ wants is necessary to make them feel heard and understood. Support employees must remember this because clients who contact support are frequently stressed and frustrated, even though the issue is quite simple to resolve. 

Therefore, support staff should take the time to demonstrate empathy for the customer rather than rush to resolve the technical issue. Similarly, developing rapport with clients, speaking to them directly, getting to know them and their business, and expressing enthusiasm for their goals all contribute to creating a human-centered customer experience. 

  1. Get other teams involved in your customer service.

Engaging all staff in frontline customer service and support is one efficient way to develop a customer-centric strategy and culture throughout your company. That is also referred to as collaboration in customer service.

That could entail holding regular cross-team talks to discuss client feedback or requesting that members of various teams occasionally listen in on customer calls. For your team to continue putting the client’s needs first in all they do, each member needs to understand the customer’s pain.

  1. Improve KPIs and customer support results.

In the early days of support software, the number of tickets resolved was a gauge of support effectiveness. CSAT, NPS, and churn rates are some tried-and-true key performance indicators (KPIs) for assessing customer support. However, it is beneficial to analyze KPIs frequently to see where they can develop.

However, many organizations are altering how they define performance as conventional support roles become more intertwined with channels and business processes. This impacts how customer support employees engage with their customers.

The support team can also take their time and become adept at dealing with the clients by knowing how your customer base will most likely contact you for support. 

  1. Connect CRM and customer support tools.

Integrate customer support and customer relationship management (CRM) technologies to track changes in your customers and their lifetime value for a more individualized approach to customer service. 90% of customers will spend more money with companies that offer personalized customer care. Transferring data between different platforms allows it to find individualized, pertinent answers to client problems that could not have been thought of otherwise. Also, agents can predict customers’ demands by using information about their past support difficulties, purchases, and opened outbound emails, among other relevant customer contexts.  

Why Is Customer Support Vital to a Business’s Growth?

Customer support is crucial because it allows prompt and efficient customer query resolution. Additionally, this affects a customer’s lifetime value, brand reputation, and customer retention.

Asking yourself the following questions will help you better understand how to develop exceptional customer support for your company:

  • What are typical customer support requirements in your sector?
  • How can customer support improve the customer’s voice across your entire company?
  • How can essential business choices like product roadmaps or marketing strategies be shared with your support team?

Conclusion

Contrary to popular belief, customer support and customer services are separate but related components of a seamless customer experience and developing strong client relationships. Customer support primarily focuses on fixing technical customer issues, but customer service comprises all the best practices, methods, and principles that guide your interactions with consumers.

In smaller businesses, the same person will typically be responsible for customer service and support. However, the customer service and support departments will have specialized teams in other, more giant corporations. However your company is set up, your success will depend on how well you can understand the differences while delivering both in unison.

amazon prime

A Comprehensive Guide to Amazon Prime [2023 Update]

If you’re not a Prime member, you probably have questions about what it is and if it’s worth the subscription fee. The benefits of Amazon Prime go beyond merely faster shipment. Members of this subscription service have access to a number of Amazon benefits. For many shoppers, just the shipping benefits make Amazon Prime a no-brainer.

An Amazon Prime membership is required if you wish to shop on Amazon Prime Day. Prime has a lot of benefits, but a subscription is not free. For free 2-day shipping, a normal Amazon Prime membership costs $139 per year, or $14.99/mo, with students and qualifying government assistance recipients receiving up to 50% off. Due to this price, many potential subscribers want to understand all the benefits included before committing to join the 200 million existing Amazon Prime subscribers.

This article will explain what Amazon Prime is and all the benefits of membership to assist you in making a well-informed decision. Here is everything you need to know about Amazon Prime, from expedited shipping to access to Amazon discounts and services. 

What Is Amazon Prime?

Amazon Prime is a subscription service offered by Amazon. It offers discounts to its members, access to exclusive entertainment and shopping services, and more.

A premium subscription to Amazon Prime is available for $139 annually or $14.99 each month. There are many benefits available to Prime subscribers. The best reward, though, is free two-day shipping on the majority of Amazon’s merchandise. In 2021, Amazon said that they have more than 200 million paid Prime members globally. 

Brief History of Amazon Prime

When Amazon Prime first surfaced in 2005, the company initially charged $79 a year for a membership and provided members with perks like two-day free shipping. This was an incredible value, and it has continued to be a significant driver of people subscribing to Prime. However, Amazon has significantly increased the benefits that members receive over time, including fashion and entertainment, savings, and other benefits. 

The pandemic led to a sharp increase in Amazon Prime membership. Former CEO Jeff Bezos claimed there were more than 200 million Prime subscribers globally in a letter to Amazon shareholders in April 2021. However, the company has not given any revised membership figures since. Before that figure, over 150 million people throughout the world were Prime members of Amazon as of January 2020. 

The pandemic may have played a big part in the high number of Amazon Prime subscribers, though. In addition to being compelled to stay at home, people were becoming more and more reliant on delivery services to buy anything from food to office supplies. 

The Benefits of Amazon Prime

The top benefits of Amazon Prime are listed below. Shipping, entertainment, and shopping make up the three areas that account for the majority of benefits. 

Amazon Prime Shipping Benefits

The most popular benefit of Amazon Prime is that it facilitates and lowers the cost of shipping. 

  • Free two-day shipping: The Prime logo may be found next to the price of thousands of items on Amazon, letting you know that you won’t have to pay for shipping and that the item will arrive at your door in two days or less. Always keep an eye out for the Prime logo as it is the easiest method to save money while purchasing on Amazon.
  • Free one-day and same-day delivery: You might have the option of choosing Prime Next-Day or Same-Day delivery if you place an Amazon order before noon. Compared to the standard two-day delivery, these options allow you to order and receive your goods more quickly. Please be advised that not every item qualifies for expedited shipment and that it is not always free. $2.99 will be required for expedited shipping if your order is less than $25. However, there are no charges if it exceeds $25. 
  • Multiple deliveries scheduled for Amazon Day: You can choose to have your packages delivered on Amazon Day when placing a purchase. With this benefit, you can select any day of the week (other than Sunday) to get all of your orders at once. Amazon Day deliveries are available for almost all Prime items. Its flexibility is an additional wonderful benefit. Even if you’ve already ordered something on Amazon Day, you are able to select a different shipping method for the remaining items you place. You’re never obligated to get deliveries on Amazon Day.
  • Earn rewards when you use No-Rush Shipping: Consider utilizing the No-Rush option if you want to save even more money on delivery. This option will cause your delivery to be delayed for days, but once it does, you’ll get rewards like free music downloads, credit toward future Amazon purchases, and more.
  • Release date deliveries: Prior to their general release, several products are available for preorder to Amazon Prime subscribers. Amazon will reserve your order and send the item as soon as it becomes available (sometimes on the same day). Sometimes there are additional fees associated with shipping on release day, which vary depending on the product. However, Amazon will reimburse you for the delivery fee if your item doesn’t arrive at your address on the day of release. 
  • Free two-hour shipping: Amazon Fresh and Whole Foods are two distinct grocery store brands that are owned and run by Amazon. Having a Prime membership simply means that you can order groceries from either brand online and have them delivered in as little as two hours to your home. However, not all locations offer grocery delivery services, and you’ll need to place an order that meets a minimum requirement that varies by location.

Amazon Prime Shopping Benefits

In addition to lowering shipping costs, Prime also grants you access to special offers and items. 

  • Amazon Prime Day: Prime Day, an annual sale day with thousands of popular items, is the best time to shop on Amazon. Only Prime members are eligible for the discounts during Prime Day, which might result in single-day savings that exceed the cost of your annual membership. Prime Day is actually a two-day event despite its name.
  • Amazon Fresh: As previously mentioned, one of Amazon’s two grocery brands is Amazon Fresh. However, only Prime members can shop from Amazon Fresh online. From canned products to fresh produce and toiletries, Amazon Fresh has everything you’d find at your local supermarket. Additionally, if your order totals a particular amount, you can be qualified for free two-hour shipping.
  • Amazon Pharmacy and Amazon Prime Rx: With the help of the Prime Rx database, Amazon Prime members can identify their prescription drugs, shop around for the best deal, and pick them up from their preferred pharmacy. Additionally, customers can have it delivered by placing an order directly from Amazon Pharmacy. Note that any discounts you receive from Prime Rx cannot be combined with insurance. A choice between the two is required.
  • Earn VIP points with Zappos: Amazon’s online shoe shop Zappos rewards Prime subscribers with added benefits. In addition to receiving free delivery on every order, you will double your VIP points and be able to access exclusive offers.
  • Free Grubhub Plus subscription: Grubhub Plus is available to all Amazon Prime subscribers for a full year. This benefit typically costs $9.99 a month and includes periodic offers for free food or discounts, zero delivery fees on orders over $12, and other perks.
  • Prime coupon: Customers have an additional means of saving money thanks to Prime Coupons. You can get coupons for up to 30% off the price at the checkout for hundreds of Amazon products each day. If a coupon is available for the item you’re viewing, it will be displayed beneath the price.

Amazon Prime Entertainment Benefits

Shipping products quickly to its subscribers isn’t just what Amazon does; they also run a massive entertainment empire. 

  • Prime Video: You can watch thousands of movies and TV shows, including Amazon’s original series, for free with Prime Video. It also features a handful of shows that are available for purchase and rental but cannot be streamed. Subscribers of Prime can also purchase additional subscriptions to more than 100 premium channels, such as Showtime, HBO, and CBS All Access, for a fee. 
  • Prime Music: Amazon offers a streaming music service called Prime Music. More than 2 million songs are available for ad-free, on-demand streaming with Prime Music. Additionally, you can upgrade to Amazon Music Unlimited for an additional $8.99 a month, which boosts the selection to 60 million songs and enables you to download them for offline listening on any smartphone device. 
  • Prime Reading: Prime Reading offers unlimited access to a vast collection of comics, books, magazines, and more, making it ideal for Kindle owners. While you cannot rent physical books, you may download ebooks and read them on your iPhone, Android, or iPad via the Kindle app.
  • Prime Gaming: This benefit, which was formerly known as Twitch Prime, allows Prime members a free monthly subscription to any Twitch channel. It also includes free monthly games, free downloadable content for select popular games, and a unique badge for all of your Twitch messages.
  • Amazon Kids Plus: Amazon Kids Plus (formerly known as FreeTime Unlimited) is a subscription service that allows you and your kids access to kid-friendly books, movies, television shows, apps, and games. Each of the three age group categories that Kids Plus offers has its own set of applications and features. Kids Plus is available to Prime members for $4.99 per month or $48 per year. Amazon also provides a free trial of one month, or the first three months for $4.99, if you want to try it out. 
  • Amazon Book Box: Amazon gives you the ability to order a box of hand-selected children’s books every month through the Amazon Book Box service, which is available only to Prime subscribers. You have a choice between four different age groups, just like Kids Plus. Furthermore, you have the option of selecting a delivery schedule for your box, which can be monthly, bimonthly, or quarterly. The books you receive are yours to keep as well. Book Box is priced at $16.99 for the first shipment and $19.99 for each subsequent box.

Other Great Amazon Prime Bonuses

Highlighted below are two other excellent Amazon Prime benefits. Although these two benefits don’t fall under the other categories, they are nonetheless valuable.

Prime Household

In order for the entire family to benefit from Prime, two adults, up to four teens, and four child profiles can all be part of the same “Household.” These perks include free shipping, Prime Video, and Prime Photos, among others. Apps, ebooks, audiobooks, and games are among the other types of content that they can share.

Linking accounts also allows adults to impose parental restrictions on digital content (for kids) and approve orders before they are placed (for teens). 

Amazon Photos

You have unrestricted storage and sharing options for photos on your PCs, smartphones, and tablets. Additionally, up to five people may share this unlimited photo storage. Additionally, 5 GB will be made available for files and videos. Since Amazon devices already have Amazon Images loaded, your Fire TV and Echo Show may also be used to see your photos.

Amazon Prints offers free standard and expedited shipping on all picture prints and other photo gifts. 

Can Subscribers Share Amazon Prime Benefits?

It’s important to note that Amazon Prime subscribers can share their benefits at no extra charge. By registering for Amazon Household, two adults with different Amazon accounts can divide the monthly or yearly price in half.

It’s ideal to do this with someone you’re close to because the accounts are connected by address and payment methods, such as a spouse or close friend. 

Can I Offer Amazon Prime as a Gift?

Yes. Simply go to Amazon Prime’s gifting page, add it to your cart, and then follow the prompts to learn how to give a friend or family member a one-year subscription. Click the “This item is a gift” box in your cart before proceeding to the checkout process; the remaining fields can be filled in later when you pay.

How Can I Sign Up to be a Prime Subscriber?

Visit the Amazon Prime website and follow the instructions. You will require both a credit card and a free Amazon account.

After that, go to your account and choose Manage Prime Membership if you decide you no longer want the subscription. If you’re already a member and don’t want to start a paid subscription, click End Membership. Otherwise, click Do Not Continue if you’re a free trial user. 

What Is the Cost of Amazon Prime Subscription?

Depending on the plan you select, Amazon Prime will cost you money; however, you can test it out for thirty days without paying a dime. The payment plans are outlined below, along with what each one entails: 

  • Prime monthly subscription ($14.99 monthly): You will pay roughly $180 a year if you want to spread out your payments and still receive all of the perks of Prime. However, a Prime subscription costs $6.99 per month if you get certain types of government assistance.
  • Prime annual subscription ($139 annually): The entire membership is a one-time payment of $139 each year. Hence, paying this amount upfront will save money over time. 
  • Prime student subscription: With a verified school email address, students can sign up for a free six-month trial of Prime Student before paying a discounted annual membership fee of $69 (or $7.49 per month). 
  • Prime Video subscription ($8.99 per month): Your benefits are limited to streaming unlimited TV shows and movies on Amazon with this subscription. You should budget for about $108 a year. 

Please be aware that when you sign up, Amazon keeps a record of your credit card information. If, after your free trial has ended, you decide you no longer want the membership, be sure to log into your account and cancel it. Otherwise, the membership fee will be charged. 

Is Amazon Prime Membership Worth It?

Whether or not an Amazon Prime membership is worthwhile depends on your shopping habits, whether or not you’re buying for an entire household, and how much use you make of the aforementioned benefits.

Free shipping alone is often enough to convince folks that the price is worthwhile. That might be enough to sign up for the service if your annual shipping costs exceed $139. 

Another way to know is entertainment streaming. With an annual membership costing $139, Amazon Prime is less expensive than both the Netflix regular plan and the commercial-free Hulu plan. Amazon Prime Music, another perk of Prime, offers access to a rather feature-rich music streaming service. You’ll recoup the cost of Amazon Prime if the variety of videos and music is so wide that you’d think about canceling your subscription to other services.

Other factors to take into account include the convenience of having your products delivered in days as opposed to weeks or not having to go grocery shopping frequently. 

By signing up for the free trial, you can determine whether an Amazon Prime membership is valuable. After the trial ends, the decision to make the investment in the subscription service is yours.

echeck payments

A Complete Guide to eCheck Payments

Cash has been mainly replaced by credit and debit cards, not only because of the convenience they give but also because there has been a considerable increase in online shopping and online services. More than 80% of Americans now make online payments, and the number of people receiving paychecks from vendors is also increasing. This is where electronic checks (eChecks) enter the picture. 

The word “eCheck,” which might have come up in conversation at some point or another, refers to another common but less publicized type of electronic payment.This comprehensive article will delve into every aspect of eCheck payments to provide you with all the information you could possibly need.

What Is an eCheck?

An electronic check (eCheck) is a payment that is made electronically using a checking account. It’s an electronic replica of your paper check.

The purpose of eChecks is to be compatible with current banking norms and procedures. When a customer uses an eCheck to make a purchase, money is transferred via the Automated Clearing House Network to the merchant’s company bank account. This reduces the number of manual procedures required to receive payment and deposits funds into your account more quickly. 

How Does eCheck Work?

The Check Clearing for the 21st Century Act, also known as “Check 21,” was signed into law on October 28, 2003. By removing the legal restrictions that stopped many banks from using check truncation, this federal law greatly enhanced the use of electronic check processing. 

In a standard check payment, one bank confirms a physical check and sends it to the other bank involved in the transaction, and that bank also verifies the physical check. 

The data required for payment processing is the same regardless of how much faster eCheck processing is than traditional check processing. Your customer must begin an electronic check by providing their account number, bank routing information, and authorization, which would also be included on a paper check.

While no limitations stop businesses from accepting physical checks, eCheck payment processing must be enabled for businesses to accept this form of payment. 

The entire eCheck payment process can be broken down into four distinct steps, all of which are pretty straightforward:

  1. Authorization: The merchant needs the customer’s consent to proceed with the transaction at this point. This stage is often handled by the payment request system of an online payment processor, where the customer can easily approve the transaction with the click of a button. Nevertheless, eCheck authorization can be accomplished via a contract, online form, or even over the phone. 
  1. Processing: As soon as the authorization is granted, the payment processor can start the process of transferring the money between the customer and the merchant. Since the amount is usually pre-determined in the solution, this step is essentially unnecessary after authorization. This procedure is also easier when you use an online payment processor. The merchant will require a manual entry of the payment and the correct account information into an online form if there are no online payment options available.
  1. Finalize: Your processor checks the credentials once you have provided all the necessary information. The Automated Clearing House (ACH) Network transfers the money after verification. While eChecks are handled over the ACH Network, it’s crucial to remember that ACH payments and eCheck payments are distinct due to their various fees and processing methods. 

It’s also important to note that many POS systems can be integrated to seamlessly transfer the data your customer submits online or in an app to your virtual eCheck terminal, thus removing the need for you to re-enter this data.

  1. Funds Deposit: This last step involves depositing the customer’s money into the merchant’s bank account (after the transaction was successful). The eCheck transaction is now complete! Normally, a written or electronic receipt is sent to both parties as confirmation of the transaction.

Difference Between ACH Payments and eCheck Payments

Although they are relatively similar in many aspects, ACH payments and eCheck payments differ in that ACH payments necessitate approval for an ACH merchant account. Funds remain unclaimed in your ACH merchant account until settlement, thus causing a snag in your cash flow. Additionally, rigorous business analysis is needed for approval of an ACH merchant account, during which many companies are turned down.

However, using an eCheck payment processor allows businesses that don’t fit the criteria for an ACH merchant account to still accept payments into their business bank account without needing a merchant account.

How Are Paper Checks Different from eChecks?

The primary difference between an eCheck and a paper check is that the former is digital, whereas the other is printed on paper. They are both different formats of the same information. 

Since eChecks are processed digitally rather than physically, they process payments far more quickly than paper checks, which accelerates the approval process in general.

Paper checks need more manual labor than electronic checks to deposit, and they also take longer to process and hold than eChecks. 

Advantages of eCheck Over Credit Card

There are various benefits to accepting eChecks rather than credit cards because they bypass card networks, use their own systems, and adhere to their own rules. eCheck can:

  • Reduce processing cost (and it may also be lower than debit cards)
  • Change the payment option for your regular customers to one that is less expensive.
  • Lower the number of declined recurring payments caused by expired card information.
  • Make it more difficult to file customer chargebacks.
  • Provide a shorter time frame for customers to start chargebacks
  • Extend your reach to people who either can’t or won’t use credit cards
  • Offer an alternative payment option that your competition might not offer.

How to Deposit an eCheck

Depositing electronic checks is easy because they are primarily virtual versions of paper checks. Usually, your eCheck service provider will give you access to a virtual terminal where you may enter the check’s information to start the transaction. Simply follow the same steps you would for any digital payment. The only way this payment differs from others is that, rather than going through your merchant account, the money will be sent straight to your business bank account.

Additionally, if your POS system and eCheck payment processor are integrated, you might immediately cash your customers’ eChecks with little to no work on your end. 

Other Ways to Deposit an eCheck

Using the aforementioned procedure, an eCheck can be processed and automatically deposited into your company’s bank account. However, you can also use the following process to deposit an eCheck: 

  • Retrieve your eCheck: When you are informed that you have received an eCheck, you can retrieve it by adhering to the provided steps. 
  • Printing your eCheck: Print out your eCheck after retrieving it. An eCheck may also be printed into a physical copy, just like digital tickets for concerts, flights, or other events can be. 
  • Deposit your eCheck: You can proceed as you would with a standard check when you use the physical version of your electronic check. All you have to do is to sign the check and deposit it in your bank. 

Can an eCheck Bounce?

The customer’s checking account often has an authorization hold in the amount of the eCheck placed on it when an electronic check is launched. By doing this, it is certain that there will be enough money in the checking account to pay the transaction until it is settled.

Of course, there are unusual circumstances in which an eCheck may bounce, but measures have been put in place to make sure they do not, which is a significant advantage over traditional check processing. 

Are eCheck Payments Secure?

Any online purchase raises security issues. On the subject of eCheck safety, people frequently turn to Google. It makes sense when you realize that, unlike credit cards, paper checks are a form of payment that hasn’t experienced any innovation in a while.

Surprisingly, in many instances, electronic payments are regarded as being more secure than a physical check because there is no physical document that may be intercepted.

Over the years, thieves have discovered ways to exploit paper checks for identity theft and fraudulent transactions. 

To evaluate it in more detail, here are a few reasons why you should have no reservations about accepting eChecks.

eChecks Payments Are Safer Than Paper Checks Payments

As stated earlier, criminals are more likely to intercept paper checks because they are physically and symbolically handled more often than eChecks. eChecks, however, send the data straight to the banking institution.

Furthermore, a paper check that is incomplete or contains inaccurate information, such as the date or the signatory, can still be processed and passed. However, if an eCheck has a problem, the transaction won’t start until the problem has been fixed. 

eCheck Payments Can Detect Potential Fraud

Through a check acceptance service, the payment gateway provider confirms the identity of the individual entering a client’s checking account details to ensure they are authorized to use the account. 

The acceptance service ensures that the requested customer data matches what the issuing bank has on record for the account by comparing it to the information it already possesses. The payment is turned down if it doesn’t. You won’t receive fake payment information thanks to the eCheck authentication process, which also makes sure that only authorized users are accessing the account. 

Furthermore, a transaction will be flagged if an account has a history of fraudulent activity after the check acceptance service has searched a database of customer and business bank records. 

Listed below are some electronic check security measures that guarantee the privacy of both your company’s and your customer’s information:

  • Multi-factor authentication
  • Transport Layer Security
  • Advanced Encryption Standard
  • Continuous security monitoring
  • Cloud infrastructure technologies

Benefits of eCheck Payments Processing

Both the business owner and the customer can benefit greatly from adopting eChecks. These benefits include: 

  • The cost is lower: An eCheck is far more cost-effective than a credit card transaction for sending or receiving substantial payments from clients, such as mortgages, monthly rent, or insurance premiums.
  • eCheck offers quicker delivery time: The speed at which the funds are delivered to your business bank account is another advantage of using eChecks. Oftentimes, the funds are available the following business day. 
  • Funds are deposited in the bank account: With eCheck, money is transferred straight to your company’s bank account and not to your merchant account. However, you can use the money from electronic checks right away because it is sent directly to your business bank account. Payments made with credit or debit cards are sent to your merchant account, where they are kept until settlement, at which point they are transferred to your company’s bank account. Since these funds aren’t immediately available, this may cause a disruption in your company’s cash flow.
  • eCheck circumvents the need for a merchant account: A merchant account is not required for eCheck processing. Businesses that are having trouble getting a merchant account may find this to be particularly interesting. High-risk businesses often submit applications for merchant accounts, but traditional banking institutions typically reject them to limit their risk exposure. Even though there are many factors to consider when determining a company’s risk level, companies listed on Mastercard’s MATCH list are virtually always regarded as high risk and may benefit from eCheck processing. 
  • There is no monetary value limit: The amount that can be paid with an eCheck is unlimited. While transaction and daily spending caps may apply to credit and debit cards, an eCheck is only constrained by the amount of money in your customer’s checking account. Offering an electronic check payment option might be particularly advantageous for companies that sell expensive products or services.

How to Send an Electronic Check

You may receive an invoice for the items or services you are paying for, depending on who you are interested in paying by electronic check. Add your financial details to this eCheck invoice. The data that is most frequently required is as follows: 

  • Your name or the name of your company
  • The bank account that will be used to withdraw money
  • the required route numbers
  • The issuing bank’s name

The eCheck is authorized once this information has been sent to the appropriate person. Verification, processing, and payment all follow at that point. 

Cost of eCheck Processing

If your eCheck payment processor levies a flat fee, it will normally be somewhere around 1%. You’ll typically pay between $0.25 and $1.50 per check if you’re levied a flat fee. Compared to many other payment options, eChecks are typically more affordable. Please be advised that prices are often higher for businesses with significant levels of risk. 

Focusing just on rates while ignoring other significant costs is a common trap that merchants fall into. Pay attention to any one of the following additional expenses:

  • Monthly fee
  • ACH return fee
  • Setup fee
  • Payment gateway fee
  • Chargeback fee
  • Monthly minimum fee
  • Expedited processing fee
  • Batch fee
  • Refundable deposit
  • Equipment fee
  • Check verification
  • High ticket surcharge
  • Check guarantee

The Estimated eCheck Processing Time

The length of time it takes for an eCheck to be processed varies depending on how many organizations are involved, including the payer’s bank, the payment processor, the ACH Network, and the payee’s bank. Before clearing, this transaction runs via a number of channels, and the time it takes to clear depends on those channels. Nevertheless, the following factors must be taken into account when determining the time required for the settlement of an eCheck:

  • The associated banking institutions
  • Your payment processor
  • The time the transaction was initiated
  • Weekends and/or banking holidays

Considering these factors, verification can take up to 48 hours, which means it could be another 3 to 5 working days before an eCheck can clear. 

Payments to Make with electronic checks

You can accept an eCheck for any products or services your firm sells if you have an operational eCheck payment processor. That is if your client decides to pay using an eCheck. This is because credit cards are currently the most widely utilized form of payment. Therefore, you can discover that the majority of your clients like to pay with a credit or debit card. 

It’s important to note that eCheck processing is regularly used by merchants when ticket sizes are significantly greater than usual. For instance, a wholesale supplier might pick eCheck as an alternative to a credit card if their credit card processor does not support a $30,000 transaction.

Allowing electronic checks may give your customers more options for paying you. And even if only a small percentage of your clients use eChecks as a form of payment, there will still be some transactions which you might profit from. 

Final Thoughts

Professionals must start accepting eChecks, given their noticeable surge in popularity. In addition to giving you more options for receiving payment, eCheck processing strongly suggests to your current and prospective customers that payments can be made more quickly and affordably.

breakdown of the largest banks in usa

A Breakdown of the Largest Banks in the U.S

According to the FDIC, there are 4,844 commercial and savings banks in the U.S with over 22 trillion dollars in assets based on the latest data available as of 2021. The top ten largest banks in the country account for 59% of those total assets; over 13 trillion dollars in value. The top four large banks in the country, JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup, hold one-fifth of all US deposits. There are many factors that determine the best bank for depositors, such as whether one wants to go into a branch or prefers to bank online. There is also the factor of personal needs at various stages in life; do you need to buy a car and thereby need an auto loan. As such, there are numerous other products banks offer that may hold greater sway among certain consumers; home mortgages, credit cards, safety deposit boxes, business accounts, even insurance products.

Then there is the question of how many of these activities can be done online or through a mobile app. What consumers want from their banks shouldn’t be an enigma and is in fact quite simple. Customers want the process to be easy. There are many ways banks offer this for their customers. Eight out of ten customers want mobile banking as their top service priority. However, proximity to the bank’s branch is a close second. Since the Great Finance Crisis which led to the bailout of banks, and some of the largest banks to be considered Too Big to Fail (TBTF), more consumers flocked to such banks with their deposits considering them to be a haven. The large banks in the country are exactly that – large! These banks have amassed a massive deposit base, offer almost all tertiary services customers can need, and accrued a majority of the $263 billion in net income earned by the banking industry in the US last year.

Considering all these different factors, we learned that it is often the big banks in the country that tick the checkboxes for offering most of those options. Below we list the top ten banks in the U.S. and explore what makes each of these large banks in the country stand out. 

JPMorgan Chase – The largest of all banks in the U.S with nearly $3.5 trillion in total assets, JPMorgan Chase, or simply Chase, has been a banking behemoth for over two decades. The company has always operated with a sound risk management strategy, often a contrarian in that regard, which has allowed the bank to grow even in times of distress. 

Being one of few banks with a ‘fortress balance sheet,’ the 2008-09 financial crisis allowed JPMorgan to hobble up competitors and prized assets such as Bear Stearns and Washington Mutual. Today, unlike other big banks in the country which are shedding branches, JPMorgan has continuously announced an expansion of the company’s branch footprint throughout the US. Today, the company has the largest branch footprint with 4,814 branches all across the continental US. JPMorgan Chase’s plans to further expand the company’s branch network by an additional 400 branches are currently underway.

Bank of America – The second largest bank in the U.S with total assets of over $2.5 trillion, the Charlotte, North Carolina-based Bank of America has over 67 million customers, which was cemented by the bank’s robust digital product offering, including a very versatile mobile app. Bank of America has a branch network of 4,200 branches with over 16,000 ATMs across the US. 

Bank of America further entrenched the company’s position in investment banking and broker dealer operations after its acquisition of famed wealth management and investment management firm Merrill Lynch in September 2008, at the height of the great financial crisis. 

The company also allows customers seamless access to Zelle, a P2P payment app with which customers can easily transfer funds to the bank accounts of family and friends. Furthermore, Bank of America is one of the few big banks in the country that has an Artificial Intelligence-powered tool, called Erica, that serves as a virtual assistant to advise customers on expense tracking, money management, and budgeting.

Following the lead of other banks in the U.S, Bank of America recently announced plans to lower overdraft fees and do away with fees associated with non sufficient funds.  

Wells Fargo Bank – The third largest of the big banks in the country with nearly $1.8 trillion in total assets, Wells Fargo traces its roots back to 1852, headquartered in Sioux Falls, South Dakota. Wells Fargo Bank has had a history of very conservative risk management allowing the bank to double its size and branch footprint in the US when the company acquired Wachovia in the wake of the financial crisis in 2008. What has resulted is a bank with the second largest branch footprint in the US, with 4,786 branches in 40 states. 

Although the bank has sought to reduce its branch footprint in light of consumer preferences and has instead started focusing efforts on an intuitive app that has earned high ratings on both the Google Play Store and Apple’s App Store. Along with Wells Fargo Online, the bank also offers the Wells Fargo Mobile app, in addition to access to the Zelle app, which Wells Fargo owns along with a consortium of other large banks in the country.  

Citigroup – The fourth largest of banks in the U.S, the Sioux Falls, South Dakota-based Citigroup, or Citibank as it is commonly known by consumers, has nearly $1.7 trillion in total assets, only 60% of which come from US operations. The bank has the smallest branch network in the US among the big banks in the country, with 668 branches in the US as of March 31, 2022. 

For many decades, during the seventies, eighties and nineties, Citibank was the largest bank in the U.S. The company was the sole American bank among a global bank ranking composed mainly of Asian and European financial institutions. The company made an ill-fated bet on challenging the Glass-Steagall Act by announcing the bank’s merger with Traveler’s Group, an insurance company, looking to offer consumers a one-stop shop of financial services. Although successful in the merger effort after the repeal of the Glass-Steagall Act, the bank became too large to manage and was unable to mitigate risks associated with the company’s subprime lending operations in the runup to the 2007-09 financial crisis. Subsequently, the bank, along with other big banks in the country, became heavily regulated and Citibank began to cut costs and scale back operations and the company’s retail banking presence. 

Regardless of the bank’s small branch footprint today, Citibank has nearly 65,000 ATMs throughout the country that do not charge any service fees, along with thousands more spread across global operations in over 160 countries.  

US Bank – The fifth largest bank in the U.S, the Cincinnati, Ohio-based US Bank started out in 1863 and currently has a total asset base of about $578 billion. US Bank, like many other big banks in the country, has a history of using mergers and acquisitions to become one of the largest banks in the country today. 

The bank has leveraged technologies such as Amazon’s Alexa, Apple’s Siri, and Google Home to offer a more seamless and convenient product offering. An example of which is US Bank’s Amazon Alexa skill to pay outstanding card balances.

PNC Bank – Wilmington, Delaware-based PNC bank is the sixth largest bank in the country with almost $535 billion in total assets and nearly 2,700 branches. Although PNC Banks is ranked among the large banks in the country, it is mostly a regional bank serving specific states in the Northeast, Midwest, and some in the South. 

PNC doubled in size in 2008 after it acquired National City Corp., the Cleveland, Ohio-based bank which became embroiled in subprime lending troubles at the height of the great financial crisis. PNC Bank further expanded operations eastward after the 2020 acquisition of BBVA USA after parent company Banco Bilbao Vizcaya Argentaria exited US operations. 

Many large banks in the country leverage their size and perception of “too big to fail” and offer minimal rates on their savings accounts. However, PNC has been cited for offering some of the best savings deposit rates in the industry.

Truist – The seventh largest bank with assets of $531 billion as a result of the 2019 merger of equals between SunTrust and BB&T. The combined entity has about 3,000 ATMs and 2,500 branches across 17 states and Washington D.C. 

The Charlotte, North Carolina-based bank offers ten million customers access to Trust’s own mobile banking app as well as access to the Zelle app to both receive and send funds as it is a part-owner of the payments app. 

Goldman Sachs – The eighth largest bank in the US with nearly $475 billion in total assets, Goldman Sachs has only been a bank after converting to a bank holding company during the 2007-09 great financial crisis. The company was founded as an investment banking partnership in 1869 in New York City, where it is still headquartered today. In May 1999, Goldman Sachs filed for an initial public offering at the height of the stock market cycle of the late-nineties, shedding the company’s partnership structure after a multi-decade debate over the decision.

In September 2008, Goldman Sachs converted to a bank holding company for the company to access the Federal Reserve Discount Window, a liquidity facility only offered to banks. The move ended a nearly 140-year era as an independent security firm, one of the very few of its kind that still existed at the time but allowed the company to survive the great financial crisis in exchange for future and ongoing prudential regulation by the U.S. Federal Reserve. The move also allowed Goldman Sachs to receive a $10 billion investment by the U.S. Department of Treasury as a form of financial bailout via the Troubled Asset Relief Program during the 2007-09 financial crisis. 

In 2016, Goldman Sachs launched Marcus, named after the company’s founder Marcus Goldman, an online bank app to diversify the bank’s funding and revenue sources by expanding into retail deposit and loan operations.  

TD Bank – The ninth largest bank with $417 billion in total assets is Wilmington, Delaware-based TD Bank. It is the only one on this list of big banks in the country that has a foreign parent, the TD Bank Group of Canada. TD Bank has 1100 over 1,100 branches across the East coast, starting from Florida all the way to Maine. TD Bank has been a culmination of many smaller banks throughout the east coast states, from the Portland Maine-based Banknorth in 2004, to the acquisition of America’s Most Convenient Bank, Commerce Bank, in May 2008. 

It was Commerce Bank that really shook up the northeast regional banking scene offering fast food-like service in the banking space. With monikers like ‘no stupid fees, and no stupid hours,’ Commerce Bank was open seven days a week, until 8 pm every day, with actual human tellers answering phones rather than automated machine prompts. Unfortunately, the bank’s convenience tagline is all that survives now at TD Bank, with none of the service pedigree around days of operations, daily schedules, or the elimination of fees.

Capital One Financial – The last of the big banks in the country to round out the top 10 is McLean, Virginia-based Capital One Financial, with total assets of $385 billion. 1,157 branches and a network of over 70,000 cost-free ATMs in the US. 

Established in 1994 after a spinoff of the credit card operations of Signet Financial, Capital One remained a relatively obscure monoline bank offering only credit cards to customers, until it expanded operations to include auto loans in 1996 after gaining approval for a savings bank charter that year. Over the next decade, Capital One gobbled up various auto and credit card loan companies before embarking on acquiring other retail banks in 2005.

Today, Capital One Financial offers very customer-centric product offerings with no minimum bank balances, no monthly fees, no-fee ATMs, no longer charges non sufficient fund fees, and has limited itself to one overdraft fee per day per customer. 

Another differentiating feature available to Capital One customers is the above-average rates offered to them via the bank’s 360 Checking accounts. The accounts offer the first 50-page checkbook for free, pays interest on all balances at a tiered-rate, allows mobile deposits, as well as online payments for bills, without any minimum balances.

Conclusion

There has been tremendous growth in offering financial services to consumers. Not all of it is a result of efforts by the large banks in the country. The advent of smartphones, faster internet, improvements in payments technology by the latest entry of technology companies into the industry, improved customer experiences have all shifted demographic habits towards a great degree of financial inclusion.

There are many headwinds that the big banks in the country face. According to PwC’s 2021 Digital Banking Consumer Survey, almost 25% of banking customers would rather transact and open their accounts digitally but are forced to do so in a bank branch. As a result, American consumers are shifting their banking activity towards direct banks, banks that exist solely online. In the US, as much as 20% of primary banking relationships are conducted via direct banks as of 2021, twice the rate of just two years prior. 

Furthermore, according to McKinsey’s 2021 Digital Payments Consumer Survey, 30 percent of those surveyed said that they have utilized the Buy Now Pay Later option. Of this cohort that used the BNPL payment option, 29 percent said that it enabled them to either make a purchase they would otherwise not have, or it allowed them to spend more than they normally could.

Furthermore, according to the same McKinsey survey, nearly 20 percent of those surveyed reported either holding or having held cryptocurrencies, mainly for purposes of an investment asset rather than a transactable currency. 

Payment options, financing options, and currency exchange have all historically been the domain expertise of banks in the U.S, namely the big banks in the country. The industry which has experienced these shifts in consumer preferences for well over a decade has been successful in managing those challenges in the past. It was a consortium of banks that launched clearXchange in 2011 to offer payments services. That initiative was signed by many additional banks and subsequently became the Zelle app, a digital solution to send and receive funds and to rival P2P payments solutions from the likes of PayPal and Venmo.

However, current trends pose bigger challenges, especially as non-banking entities encroach into some areas of the banking industry with their own payments solutions, just as the industry has been slow to adopt in other areas.

retail payment trends

Important Retail Payment Trends to Watch in 2022

Payments trends have seen so many iterations over centuries, evolving from barter to coinage, to currency notes, then onto checks, charge cards, and debit cards. Fast-forward to today and customers can pay by simply swiping their smartwatch next to a point of sale device at a retailer.

Over the past few years consumers have noticed a trend in retail payments; it is much easier and quicker to process. This makes shopping a breeze and likely to encourage shoppers to come back into stores as they may no longer have to wait in long lines at the counter. The formula for payments innovation from a consumer perspective is very straightforward. Allow for the technology to be used in as many places as possible, make it simple and seamless to use, ensure that the user’s personal and financial data is secure, and make sure that it’s free, or as close to it as it can be. The payment’s innovation need not be the main product itself. It can be a simple add-on feature of another offering to drive stickiness for that product.

The payments sector and retail are both industries that have recently become crowded with competitors chasing the same customers. There are many forces driving these changes, including more individuals starting businesses that are at crossroads of retail and eCommerce, a broader trend among creatives looking to leverage their skills in eCommerce and the cloud enabling them to start businesses at a much quicker rate. Furthermore, customers flush with cash and unable to do much with it as they were locked in their homes have diverted disposable incomes towards retail goods purchases, primarily online. This in turn drove up prices, margins and profitability among retailers and payments companies which were positioned to capitalize on the trend and facilitate online ordering and contactless payments. This has led to a massive inflow of investment in the sector

Below we take a look at the important retail payment trends to watch in 2022. They are going to have a great impact on consumer behaviors and are likely to offer new conveniences and speed which will result in customers spending more, both in-store and online. 

Digital Payments adoption will grow

One of the biggest trends to unfold in retail payments in 2022 is something that will remain constant; digital payment adoption will continue its upward trajectory. Near field communication, or NFC, was intended for payments and patented in the early 2000s. It was the introduction of smartphones that presented a viable use for the technology. The introduction of companies such as Square and Stripe offered quick set up for merchants to start accepting card payments on the go ushering in the use of smartphones to accept payments, in the late 2000s. Slowly, in the last decade, as apps caught on as a standalone tool to deliver every kind of service, payment companies and technology companies began to leverage payments technology within smartphones. 

It did take some time for consumers to become comfortable with the trend, but once they experienced the convenience and speed of digital payments offered, there was no turning back.

Every entity collecting payments which has a stand-alone app offers a payments processing option. Furthermore, mobile wallets such as Apple Pay and Google Pay, or digital payments platforms such as PayPal or Zelle, all allow users to send payments, whether that is to pay bills or subscription fees. Even the IRS has the IRS2Go app to pay taxes. 

If that wasn’t enough, there are companies such as Plaid that serve as a conduit connecting financial institutions and fintech apps and digital accounts to enable the flow of funds between parties but without exposing consumers’ personal financial information.

These developments showcase the drivers of further adoption of digital payments in retail. Firstly, there was a massive technological infrastructure development push to boost digital payments adoption. The main aim of many of these technologies is customer convenience. This displays that Fintech companies are doing their because according to the most recent AmEx Digital Trendex Digital Payments report, convenience is the number one reason consumers use digital payments such as peer-to-peer payments (P2P).

Embedded Payments

Payment capabilities available natively to specific software, SaaS, or apps are another major trend within retail payments in 2022. Numerous companies are currently working to introduce solutions that embed a payment option within their platform. This is intuitive because it will not require consumers to exit the platform to process their payment, it can all be done directly within the platform. 

There are many benefits for retailers when implementing embedded payments. First is the convenience it offers. According to the AmEx Digital Trendex report cited earlier, consumers are growing more comfortable with sharing their financial information with retailers to store their payments details on file.

Saved payments details of consumers allow them to set up payments much more quickly and it  offers the retailer the ability to save the customer’s card information in their records, also known as card on file. This further enables easier checkouts and repeat customers as consumers are more likely to shop at retailers in which they have a card on file. 

Security is another benefit of embedded payments. Since consumers don’t have to enter data every time since their card is already on file, the payments are processed without leaving from the platform’s native environment, avoiding any data-entry associated mistakes.

Retailers will begin to start offering payments solutions 

Like many retailers launching store branded cards, the trend to watch in 2022 will be how many retailers will look to leverage their brand and trust with customers to start offering payments solutions on their own. In a tightening economic environment, new sources of revenue growth and areas in which they can further improve customer lifetime value are quickly drying up. Creating a payment solution offers the opportunity to quickly realize gains of as much as 10% by implementing this into a company’s product offering.

This is going to be an experiment that retailers will look at to gauge if creating a payment solution will save them money in the long run. However, this will pose a great headwind for those who take on this experiment. Although the payments industry is attracting a great degree of venture capital and interest from companies that are traditionally technology companies, it is important to have relevant expectations given how nuanced payments are. On the back-end, retailers still need to work with a financial intermediary to set up a merchant account. There is also compliance and a great deal of fraud protection initiatives that must be implemented as a minimum requirement of all card networks. 

The inability to master the niche compliance needs regarding security and fraud detection are one of the greatest hurdles that inhibit many new entrants from going through with their payments plans. Facebook’s Libra initiative is a perfect example of a very successful company in one industry who is having significant trouble translating that success into the payment industry. 

Different Industries will launch their own Buy Now Pay Later service. 

Buy Now Pay Later will play a big role in the success of many retailers. Apple is doing it, and others will soon follow suit. In an environment of tighter economic conditions, retailers will look at all options to expand margins. Many will question why they’re giving up a treasure trove of data and margins to a 3rd party when they can bring that operation in-house.

BNPL has had major ramifications for retailers, the Fintech industry, and consumers. Many consumers can now purchase something that they could not have dreamed of doing before by having good credit and then getting approved for a line of credit by a bank to finance the purchase. Now, no credit checks, no more long applications and longer wait times. Not even interest on those payments or late fees. Just pay four installments on time at the regular retail price and those Gucci jeans or that iPhone 13 Pro Max is yours completely in four months. 

It is the modern day version of the lay-away plan, except you get your goods now. Buy Now Pay Later basically lets consumers buy the product now with an agreement of four or five equal monthly installments to finance their purchase. There are currently payment companies such as Klarna and Affirm, that finance your purchase. 

However, many have sounded the alarm on how it is creating a generation of society debt trapped and unaware , kind of like the way pay-day loans have worked. Others are more tactful and highlight using research how BNPL is enabling buyers to make purchases they would otherwise not have, which is not always a good thing.

Say what you may about BNPL, but it is one aspect of payments that retailers have the highest probability of succeeding at if implemented. It’s the reason Apple has launched its own BNPL service, and many more will follow in 2022.

Everyone wants a Super App

One of the biggest reasons companies have started to embed payments into their platform or SaaS application as well as dabble with payment processing solutions in-house is their quest for a Super App. Once a company has super app status, it has complete rule over all smartphone activity in that region. 

One obvious trend we experienced is how commonplace smartphones have become. They are almost the modern day equivalent of having electricity. More and more, our daily lives revolve around smartphones. Everything we think of doing, we reach for our smartphone. Most of our routine is accomplished via specific apps on the smartphone, including going to a restaurant, making a grocery store trip, paying for anything, ordering a cab, studying, movies, music, dating, and about ninety percent of everything else humans do on any given day. 

The logic of a super app is that if it could address about two to four different daily routines, it would become the de facto app that consumers would open. So, think along the lines of using the Amazon app to order something online. Add to that an entertainment aspect, that’s where Amazon Prime comes in. One additional thing you can add to that is delivery service or ride hailing, which is typically done by the same app – but exactly the kind of deal you would sign with GrubHub if you had Super App ambitions. 

All major companies are in a race to become a super app. They all know that once they achieve that status, they will see an increase of potential trillions of dollars in market capitalization on top of their already multi-billion dollar valuations. That is because they will become a self-sufficient ecosystem to which all other apps and vendors must utilize to ensure their relevance. Can you imagine if the likes of Amazon or Google had to do that with Apple if it achieved Super App status first? Facebook is already experiencing this as it does not control the distribution channel to its customers and is beholden to Apple’s policies. The ultimate prize for a Super App is going to be adoption in the highest populated countries with the highest amount of disposable income.

And the great thing about super apps is that there are already case studies offered by successful super apps that validate this supremacy thesis. One only needs to look at China with its home-grown super app WeChat. With one billion users, the company commands eyeballs for almost all activities, whether that is to pay for food, use a bank, invest, hail a cab, or pay a government fine. Everything is done on WeChat and WeChat alone!

Payments will be faster

Speed at which customers pay has been the holy grail for payments solutions providers. Why? Customers don’t like to wait, nor do merchants receive their money. So, speeding up payment time is crucial. Checks take anywhere from 24-48 hours to clear. P2P platforms, such as Venmo and PayPal help merchants receive funds right now. Credit cards have some way to go. Although the payment is processed in a matter of seconds, merchants can sometimes still wait anywhere from 2-3 days to see the money in their bank account. 

There have been some innovations in the space over the last decade with the advent of next day funding and same day funding. But those are highly focused on transaction timings and not truly real time.

However, that is about to change with FedNow. Although the Federal Reserve will be utilizing a 50 year old technology already in place in many parts of the world, it is one that will now be implemented at a government level initiative in coordination with some of the largest financial institutions in the US. Originally launched as a pilot in 2019, the system is available 24/7/365 that collects payment details, authenticates the information, and settles it in a matter of micro-seconds. The system is being extensively tested in 2022 and expected to be completely operational by 2023.

Conclusion

The retail payments industry is the front line of testing the latest changes to payment methodologies among consumers. There a robust sample size of consumers with whom market research can be easily conducted is ideal to quickly gather feedback. As more retail payment options come online and new trends emerge, it is important for retailers to stay aware of all these changes. BNPL is becoming a more common offering and one that retailers are starting to believe can be easily incorporated into their service offered independently by themselves.

In fact, many types of payment systems are quickly becoming an area that retailers have begun to experiment with to see which option best suits their customers and business needs. Shopify is leveraging its brand name to capture a larger piece of the shopping experience by launching payment solutions. Based on positions opening up at Automattic for its WooCommerce division, it appears that the company is engaging in a similar strategy. 

Retail payments trends are important as they have the tendency to catch on and become sticky for consumers if they offer the right level of convenience and address a specific need. Currently, the need is for digital payments and with different forms with convenience built in, while the heavy lifting around security and privacy is done seamlessly, behind the scenes. These trends will shape the retail industry for years to come and will become as commonplace as the ATM machine once was or smartphones are today. It will serve retailers well to pay close attention to them and prepare.