We all send invoices to our clients and mostly have to follow up with a kind payment reminder. Because receiving your payment does not always happen as fast as you would like. The invoice goes missing in the post, is stuck in an email inbox, or is put on a pile of administrative TO DO tasks. The result: delay in payment. Next, the person paying will add the exact bank details and required payment reference. That is if you’re lucky. For that reason, payment links exist: they are the most straightforward way of making an online payment.
A payment link is a clickable link that allows a customer to complete a purchase or start payments online. They help simple online payments and don’t need additional infrastructure, a website, or any code to set up and use. The link is sent across any digital channel, including text messaging, email, social media, and messaging platforms. There are also email invoices containing payment links that are usually sent via email as a request for payment.
Statistics show that link-based payments are on the rise:
- Payment links via SMS or WhatsApp have emerged as the frontrunner in contactless payments in the second wave of the pandemic.
- One pay-by-link provider reports seeing 6x growth in transactions from 2020 to 2021.
- Digital invoicing, which traditionally uses a payment link, is expected to grow at a compound annual growth rate of 21.5% from 2020 to 2027.
How they work
Any merchant can easily create a payment link. Merchants provide information such as amount, currency, and description in the payment service provider’s dashboard. Afterward, they generate a payment link. Next, when it’s time to collect the payment, they send the payment link to the customer to start the transaction. The link is “linked” to a secure payment page where the merchant’s name and all payment details are already pre-filled. All the customer must do is open the link and complete their payment.
What are the benefits of payment links?
Payment links have the highest potential for consumer and merchant adoption. That’s because it requires little effort from both parties involved in the payment process. Adding a payment link to the process offers merchants many benefits:
- Faster payment
Research shows that invoices that contain a digital payment link are (on average) paid 3x times faster. Moreover, 40% of customers (link in Dutch) who receive a payment link generally pay within 24 hours. Usually, only 5 percent of traditional invoices are paid within a day. The seamless payment experience of a payment link attributes to faster payment. This naturally results in more sales and a positive result for businesses’ cash flow.
One of their biggest benefits is the many ways to send payment links to customers. In other words, the best way to reach and encourage them to pay quickly. This helps to avoid having to use channels that customers aren’t familiar with. Payment links offer customers flexibility over which channel they use to interact with the merchant. This can either be by email, WhatsApp, or chat. When received via customer service channels, they can be used to pay directly. Especially now that many businesses offer chats.
- No IT integration
Generating payment links is easy to do for merchants. A merchant connects to a payment service provider. After that, there is minimal IT work or technical know-how required to create or manage payment links. This makes it a great alternative to businesses without a website or checkout page.
How can you make them work for your business?
As mentioned before, payment links are probably the most forward and simplest way of online payments. They are an excellent payment option for businesses big or small. Imagine you’re a business that offers seasonal services or products and therefore typically sees large fluctuations in the number of transactions. A full-fledged payment provider might not be your best bet. Instead, payment links offer the desired flexibility. Especially during those off-peak periods when the number of transactions is low. Also, custom-generated links are very helpful for independent service providers who charge on a per-project basis.
Payment links offer an easy and straightforward solution. It makes real-time payments simple for both merchant and customer. Pre-filled payment information improves the speed and efficiency of payments. Not to mention increase the number of successful payments. In today's world, it’s become essential to look at what type of payment option fits best into your customers’ experience. Payment links simply provide businesses with a competitive advantage.
Learn more about how Sentoo can help you implement payment links, so you can start collecting payments easily and quickly.