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7 trends in online payments to watch for in ecommerce

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In our fast-paced business world, payment technologies are constantly evolving and changing. And it’s important for all businesses, large and small, to be aware of the current trends in online payments in order to better stay ahead of the curve.

These days, most businesses that sell products and services online rely on online payment processing.  At its best, online payments are fast, convenient, and efficient, enabling customers to pay for things in a streamlined, accessible way — and encourage them to come back to your brand in the future.

But if your company offers a lackluster or inefficient payment system, it could be a massive detriment.

That’s why it’s so important to watch for the latest trends in online payments — and to keep up with them.

 

Let’s explore the latest trends in online payments and how to ensure your business stays up to speed.

The latest trends in online payments

These are some of the most powerful trends in the world of online payments today:  

  • More payment options.
  • Temporary security code.
  • Contactless payment.
  • Biometric authentication.
  • Voice-based payments.
  • Convenient mobile POS.
  • Advanced security.

Let’s dive into these trends and see how you can put them to work for your business.

1. More payment options

Your company probably accepts payments from a few different credit card and debit card providers already.

But do you accept Bitcoin? What about other types of cryptocurrency? Or mobile payment wallets?

Bitcoins scattered on top of 100 dollar bills

Adding new forms of payment acceptance isn’t especially difficult or expensive, and it could open the door to an entirely new segment of customers.

People who strongly prefer to pay for their goods with a niche payment method will be grateful they have the option with you, potentially increasing customer loyalty and helping to differentiate your brand from your competitors.

2. Temporary security code

If someone gets their hands on your credit card number, they can use it to make fraudulent purchases, right? Actually, this is increasingly not the case.

These days, major credit card providers are utilizing new forms of security, including temporary security codes that serve as a secondary form of authentication.

Your online payment processing system should accommodate these security features to keep your consumers safe.

3. Contactless payment

There are currently more than 300 million contactless cards in the United States alone, and that number is only growing.

Waving a credit card over a mobile phone is much more convenient than entering a long string of numbers — and it doesn’t impose any additional security risk.

4. Biometric authentication

Similarly, we’re seeing an increase in the number of businesses using forms of biometric authentication. Biometric authentication relies on the physical characteristics of a person to verify their identity; for example, facial ID or fingerprint readers can confirm that you are who you say you are, and decrease the chances of someone hijacking your identity.

While biometrics have some weaknesses and flaws, they help boost consumer trust and security overall.

5. Voice-based payments

Did you know that 35% of consumers now use smart speakers on a regular basis to buy things like groceries and home care products? That’s why so many online brands are shifting their focus to cater to voice-based payments.

Streamlining the payment process for consumers with smart speakers has the potential to reward you in many different ways.

6. Convenient mobile POS

Online payments aren’t just for consumers buying things online; they can also be used to streamline in-person purchases. With a better mobile point of sale (mPOS) solution, you can make payments faster, easier, and more secure for your customers, no matter where you choose to serve them.

Fortunately, you’ll have a wide variety of provider options here; review your options carefully and find the best fit for your brand and your customers.

7. Advanced security

Security cameras on a light pole

Credit card fraud is a serious issue, and it’s only getting more pervasive. In the United States alone, consumers lose upwards of $10 billion in illegal transactions every year. Some of the security burden falls on your customers; it’s their responsibility to ensure their credit card isn’t stolen or misused.

However, it’s also your responsibility to minimize the opportunities for cybercriminals to get away with fraud.

 

More companies are investing in machine learning and artificial intelligence (AI) based security, giving them the power to catch unusual activity and thwart it while also providing better safety measures to customers using their preferred payment methods responsibly.

How to stay on top of new trends

We’ve covered some of the most important trends in online payments to help you understand and incorporate them into your business. But payment trends change constantly.

New technologies emerge, customer preferences change, and agile competitors find new ways to streamline the online payment process. So how can you keep up?

1. Subscribe to top publications

First, look for major publications in the online payment processing space. Major brands in the banking and finance industry, including JP Morgan and Visa, often publish new articles and reports for consumers to remain informed.

Add these publications to your regular newsfeeds and check back regularly for new information. It’s the best way to stay informed about upcoming technologies and significant trend shifts.

2. Follow influencers on social media

It’s also a good idea to follow influencers in the online payment space. Though this industry isn’t as fun as, say, travel, there’s still a niche community of experts who are open with their opinions and proactive in finding new technologies to share with the world.

3. Pay attention to digital payment providers

You’re already working with an online payment provider, so try to work closely with them in the future. Read their blog to stay on top of new and upcoming technologies.

Talk to your sales rep or customer service rep about your top concerns. Be willing to try new products or features that roll out, and don’t become too complacent with your current system.

Editor’s note: Check out everything GoDaddy Payments has to offer. You can take secure payments through your online store, or use Virtual Terminal and Pay Links — whatever works for you, all with no monthly fees.

4. Research your competition

Hand resting on a notepad with printed graphs underneath

Finally, pay attention to your top competitors. Go through their online checkout process and learn about new features they’re adding to their website.

If they add something new or change something, it’s a great opportunity to learn more and potentially close the gap.

Keeping up with the latest trends in online payments can be difficult, but it’s much more manageable if you keep your company adaptable and commit to paying attention to the latest changes.

Be aware of new trends and technologies as they emerge — and be prepared to update your company’s offerings if and when necessary.

The post 7 trends in online payments to watch for in ecommerce appeared first on GoDaddy Blog.



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Banking

Overdraft Protection: What It Is and Different Types

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Overdraft fees can be a major drain on your finances. Some banks charge more than $30 per overdraft and potentially charge that fee multiple times per day if you keep making transactions that overdraw your checking account. If you want to avoid these fees, you can typically opt out of overdraft coverage with your bank. It can be useful, however, to set up overdraft protection instead of opting out so you don’t find yourself unable to pay for something urgent.

What is overdraft protection?

Overdraft protection is a checking account feature that some banks offer as a way to avoid overdraft fees. There are several types of overdraft protection, including overdraft protection transfers, overdraft lines of credit and grace periods to bring your account out of a negative balance. Some other overdraft coverage programs might be a combination of these features.

Before you opt out of overdraft protection altogether — which means your bank will decline any transaction that would result in an overdraft — consider how you might need overdraft coverage in an emergency. For example, maybe you’re using your debit card to pay for gas on a road trip. You need enough fuel to get home but don’t have enough money in your checking account. Instead of dealing with running out of gas, you may want to deal with an overdraft.

How does overdraft protection work?

Here are more details about the main types of overdraft protection that banks tend to provide.

Overdraft protection transfers. When a bank allows you to make an overdraft protection transfer, you can link a savings account, money market account or a second checking account at the same bank to your main checking account. If you overdraft your checking, your bank will take the overdrawn funds from your linked account to cover the cost of the transaction. Many banks allow this service for free, but some banks charge a fee.

Overdraft lines of credit. An overdraft line of credit functions like a credit card — but without the card. If you don’t have enough money in your account to cover a transaction, your bank will tap your overdraft line of credit to cover the remainder of the transaction. Lines of credit often come with steep annual interest rates that are broken up into smaller interest charges that you keep paying until the overdraft is paid back. Be aware that a line of credit could end up being expensive if you use this option to cover your overdrafts.

Grace periods. Some banks offer grace periods, so instead of immediately charging an overdraft fee, the bank will give you some time — typically a day or two — to return to a positive account balance after overdrafting. If you don’t do so within that time frame, your bank will charge you fees on any transactions that overdrafted your account.

Other coverage programs. Some banks are taking a new approach to overdraft protection by offering what’s basically a free line of credit with a longer grace period for customers to bring their account to a positive balance. One example, Chime’s SpotMe® program, allows customers to overdraft up to $200 with no fees. The customer’s next deposit is applied to their negative balance, and once the negative balance is repaid, customers can give Chime an optional tip to help keep the service “free.”

Chime says: “Chime is a financial technology company, not a bank. Banking services provided by, and debit card issued by, The Bancorp Bank or Stride Bank, N.A.; Members FDIC. Eligibility requirements and overdraft limits apply. SpotMe won’t cover non-debit card purchases, including ATM withdrawals, ACH transfers, Pay Friends transfers or Chime Checkbook transactions.”

4 ways to avoid overdraft fees

  1. Set up low balance alerts. Many banks offer an alert option so you’ll get a text, email or push notification if your account drops below a certain threshold. These alerts can help you be more mindful about your balance so that you can put more money into your account or spend less to avoid an overdraft.

  2. Opt out of overdraft coverage. If your bank doesn’t offer overdraft protection — or if its only options cost money — you may want to opt out of overdraft coverage, in which case your bank will decline any transactions that would bring your account into the negative. Keep in mind that this option could put you in a sticky situation if you’re in an emergency and can’t make an important purchase because you don’t have overdraft coverage.

  3. Look for a bank that has a more generous overdraft policy. Many banks are reducing or eliminating their overdraft fees, so if overdrafts are an issue for you, do some comparison shopping to see if there are better options available.

  4. Consider getting a prepaid debit card. Prepaid debit cards are similar to gift cards in that you can put a set amount of money on the card, and once you run out, you can load it with more money. The prepaid debit card can’t be overdrawn because there isn’t any additional money to draw from once its balance has been spent.

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Business Ideas

Startup Business Grants: Best Options and Alternative Funding Sources

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Startup business grants can help small businesses grow without debt. But if you want free money to start a company, your time may be better spent elsewhere. Competition for small-business grants is fierce, and many awards require time in business — often at least six months.

Some grants are open to newer businesses or true startups. And even if you don’t qualify now, it can pay to know where to look for future funding. Here are the best grants for small-business startups, plus alternative sources of startup funding to consider.

How Much Do You Need?

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Government startup business grants and resources

Some government programs offer direct funding to startups looking for business grants, but those that don’t may point you in the right direction or help with applications:

Grants.gov. Government agencies routinely post new grant opportunities on this centralized database. If you see an opportunity relevant to your business idea, you can check if startups are eligible. Many of these grants deal with scientific or pharmaceutical research, though, so they may not be relevant to Main Street businesses.

Local governments. Lots of federal grants award funding to other governments, like states or cities, or to nonprofit economic development organizations. Those entities then offer grants to local businesses. Plugging into your local startup ecosystem can help you stay on top of these opportunities.

Small Business Development Centers. These resource centers funded by the Small Business Administration offer business coaching, education, technical support and networking opportunities. They may also be able to help you apply for small-business grants, develop a business plan and level up your business in other ways.

Minority Business Development Agency Centers. The MBDA, which is part of the U.S. Department of Commerce, operates small-business support centers similar to SBDCs. The MBDA doesn’t give grants to businesses directly, but these centers can connect you with grant organizations, help you prepare applications and secure other types of business financing.

Local startup business grants

Some local business incubators or accelerators offer business grants or pitch competitions with cash prizes. To find these institutions near you, do an online search for “Your City business incubator.”

Even if you don’t see a grant program, sign up for their email newsletter or follow them on social media. Like SBDCs and MBDAs, business incubators often provide business coaching, courses and lectures that can help you develop your business idea.

Startup business grants from companies and nonprofits

Lots of corporations and large nonprofits, like the U.S. Chamber of Commerce, organize grant competitions. Some national opportunities include:

iFundWomen. iFundWomen partners with other corporations to administer business grants. You can fill out a universal application to receive automatic notifications when you’re eligible to apply for a grant.

Amber Grant for Women. WomensNet gives two $10,000 Amber Grants each month and two $25,000 grants annually. Filling out one application makes you eligible for all Amber Grants. To qualify, businesses must be at lesat 50% women-owned and based in the U.S. or Canada.

National Association for the Self-Employed. Join NASE, and you can apply for quarterly Growth Grant opportunities. There are no time-in-business requirements for these grants of up to $4,000, but you’ll need to provide details about how you plan to use the grant and how it will help your business grow.

FedEx Small Business Grant Contest. This annual competition awards grants to small-business owners in a variety of industries. You can sign up to receive an email when each application period opens. To be eligible, you’ll need to have been selling your product or service for at least six months. Be mindful, though, that each grant cycle receives thousands of applications.

Fast Break for Small Business. This grant program is funded by LegalZoom, the NBA, WNBA and NBA G League and administered by Accion Opportunity Fund. You can win a $10,000 business grant plus free LegalZoom services. Applications open during the NBA season, which runs from fall to early summer each year.

Alternative funding sources for startups

New businesses likely won’t be able to rely on startup business grants for working capital. The following financing sources may help accelerate your growth or get your startup off the ground:

SBA microloans

SBA microloans offer up to $50,000 to help your business launch or expand. The average microloan is around $13,000, according to the SBA.

The SBA issues microloans through intermediary lenders, usually nonprofit financial institutions and economic development organizations, all of which have different requirements. You can use the SBA’s website to find a lender in your state.

Friends and family

Asking friends and family to invest in your business may seem daunting, but it’s very common. Make sure you define whether each person’s money is a loan and, if so, when and how you’ll pay it back. Put an agreement in writing if possible.

Business credit cards

Business credit cards can help you manage startup expenses while your cash flow is still unsteady. You can qualify for a business credit card with your personal credit score and some general information about your business, like your business name and industry.

You’ll probably need to sign a personal guarantee, though, which is a promise that you’ll pay back the debt if your business can’t.

Crowdfunding

If your business has a dedicated customer base, they can help fund you via crowdfunding. Usually businesses offer something in exchange, like debt notes, equity shares or access to an exclusive event.

There are lots of different crowdfunding platforms that offer different terms, so look around to find the model that works best for you.

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Finance & Accounting

Why Is Crypto Down?

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For crypto investors, any given day can feel like a roller coaster ride. The price of Bitcoin, for instance, regularly goes up or down by more than 5% in a day. In contrast, stock indices like the S&P 500 or Dow Jones Industrial Average rarely see swings that large.

During a bad turn for digital assets, it’s natural to wonder what caused the price drop — and what you can learn from it. Of course, each day on the market may bring a different answer for why crypto is down (or up), but understanding the basic mechanics behind crypto’s volatility can help you make better decisions.

Here are some of the many possible reasons behind big drops in prices:

  • Low liquidity. If a cryptocurrency is trading at lower-than-usual volumes, weird things can happen, like a single large trade throwing off the market by swinging prices closer to the value of that transaction.

  • Speculative trading dries up. High-risk trading with hopes of quick returns can end badly when momentum wanes.

  • Loss of trust. Trust in a product is a price driver. If it evaporates, prices can, too. In addition, because crypto is a novel asset class based on relatively new technology, signs of trouble such as cyberattacks or product failures can adversely affect the overall market.

Whatever the reason behind the crypto price trends of a single day, it’s important to remember that volatility has been a defining part of crypto investing.

Even Bitcoin.org, the website started by Satoshi Nakamoto to help explain Bitcoin, doesn’t shy away from that fact when it states: “relatively small events, trades, or business activities can significantly affect the price.”

Making sense of the bigger picture

In addition to dropping a lot in one day, cryptocurrencies are vulnerable to macroeconomic factors that can push down values for weeks or months.

In November 2021, a price decline turned into a sustained nosedive that continued until midway through 2022, when prices stabilized far below their lofty former highs.

Crypto’s drop coincided with price declines in many asset classes, but the declines in crypto were far steeper. For example, the S&P 500 dropped around 25% but has clawed back about half of those losses. Meanwhile, Bitcoin is still worth less than half of what it was before Thanksgiving 2021.

When explaining crypto’s drop, sometimes called “crypto winter,” experts point to the same root cause: Investors were looking to offload risky assets of all types amid economic uncertainty.

Adam Grealish, director of investment solutions and GM of advisory at Altruist, a software platform for financial advisors, said the scale of these big declines in crypto prices undercuts “the story about it being digital gold and a place where folks are moving to protect wealth.”

“While there’s an interesting theoretical argument for it, empirically it trades much more like a risky, high-volatility asset,” Grealish said.

The macroeconomic environment in 2022 hasn’t been kind to risky assets.

Red-hot inflation has driven prices up. In response, the Federal Reserve raised rates, which lifted the interest charged for all types of loans. When money is more expensive, stocks and other assets can suffer. As a result, investors tend to flee riskier investments, including crypto.

While this is bad news for investors and customers alike, Greg King, founder and CEO of crypto investment firm Osprey Funds, says this is part of an evolutionary process that will improve the industry in the long run.

“Our view is that it’s a positive in cleaning out some of the dead wood there,” he says. “All of the companies that went under that were in the press were centralized operations with poor risk management.”

It’s impossible to know what course the crypto market could take from here.

If interest in cryptocurrency investing recovers to the levels seen in 2021, that could benefit people willing to weather the tough times. But don’t confuse a volatile asset for a basketball; only with the latter can you expect a bounce back because it fell. Volatility means that prices could still go in either direction.

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