FinTech Companies – Collecting Payments to Save Time
Technology is ever evolving and finding solutions to problems we didn’t know existed. Small businesses today experience many struggles with inefficiencies due to a lack of resources or expertise, and none more so than through the use of antiquated banking practices. It is the year 2017 and still businesses are sending and receiving payments in the form of paper cheques, wire transfers and money orders.
According to a study conducted by Scotiabank in 2015, each cheque issued can cost an average business between $9 to $25 including the cost of the cheques, employee time, mailing and distribution costs, and the cost to reconcile with accounting records.For some this is an area of frustration, and for other business owners – they don’t even realise a problem exists in the first place. Either way, there are solutions.
Several Financial Technology (FinTech) companies have been working hard at eradicating these inefficiencies by creating cost effective tools for collecting payments. The development of online payment processing systems to eliminate waste and increase efficiency is key to the future success of small businesses. Choosing the right product might not be the easiest of tasks, given the youth of this industry, so here is a breakdown of the best options:
Plooto
Fees: $1.00 flat fee per transaction or less, $9.99 per cross border transaction (+ additional mid-market currency exchange rate) flat fee.
How It Works:
- Import outstanding invoices.
- Customers view and pay invoices online.
- We update your accounting software.
Benefits: Plootoworks to replace cheques by running bill payment and receivables processes managed all in one location, saving you time, money, and paper. You could be losing as much as 3% of your sales to transaction and credit card fees. Plooto’s flat per transaction fee offers cost assurance and certainty with no monthly fees or setup costs.See https://www.plooto.co/ca/features.
Rotessa
Fees: $9 (1-5 transactions/mo), $29 (6-50 transactions/mo), $49 (51-100 transactions/mo), $69 (101-250 transactions/mo), $89 (251-500 transactions/mo), 500+ (call for pricing).
How It Works:
- Set up a Pre-Authorized Debit agreement with your customer.
- Enter, import or sync customer bank account details into Rotessa from any device connected to the internet.
- Enter, import, or sync a one-time or recurring transaction schedule into Rotessa based your agreement with your customer.
- We’ll withdraw funds from your customer’s bank account based on the amounts and dates entered.
- Reports are available 24/7 to learn the status of each transaction. Within a week we’ll transfer a settlement to your account and provide a detailed statement.
Benefits: Rotessa’s mantra is “never wait for another payment. Enjoy consistent cash flow & fewer doubtful accounts when you initiate payments through pre-authorized debits.” See http://rotessa.com/#overview
Which is better?
Both systems are compatible with both Quickbooks Online and Xero – the two leaders in cloud based accounting software, and operate fairly similarly. The two payment processing systems are intuitive to learn, and highly rewarding when implemented properly. Rotessa offers a more favourable pricing model for businesses completing a higher number of transactions each month, but the differences beyond that are few and far between.
For more information on these systems, as well as other FinTech payment processing systems please reach out to us at Insight Online Accountants.
