A graphic illustrates how digital payments work on a mobile device.

Digital payments: A small business guide

What is a digital payment?

A digital payment is an electronic transfer of funds directly from the buyer’s bank account or credit card to the seller.

Preparing your small business to process digital payments is more important than ever. Over 40% of Americans say they make none of their purchases using cash in a typical week, according to Pew Research

Electronic payments are quickly becoming more common and have the potential to make your business more efficient and accessible to customers. Read our small business guide to learn how digital payments work.

A graphic illustrates three statistics about digital payments.

Types of digital payments

A graphic shares the six most common digital payment options in 2023.

Digital payments come in a variety of cashless and contactless forms. Although most digital payments are interchangeable, each type of digital payment has its own use case, pros, and cons that we’ll explore further.

Cashless payments are set to increase by more than 80% from 2020 to 2025.

Debit and credit cards

In 2020, QuickBooks Payments found that 1 in 5 small businesses around the globe doesn’t accept credit cards.

Choosing not to accept a common form of payment can put small businesses at a competitive disadvantage. Accepting card payments requires a payment system, including a merchant account for your business and a point of sale (POS) or payment portal to facilitate transactions. 

Payment gateways provide a secure pathway for payments to move from your customer’s bank account to your merchant account and, eventually, your small business bank account. So what are the pros and cons of accepting credit or debit cards?

Mobile payments

The global mobile payment market is predicted to surpass $600 billion by the end of 2030. (Global News Wire)

Mobile payments are transactions that use a mobile device, such as a smartphone or a smartwatch, to pay for goods or services. You can make payments in different ways, such as using a mobile app, a QR code, a contactless card, or biometric authentication.

Digital wallets

A digital wallet is an application that allows you to store and use your payment information on a smart device, such as a phone or a tablet. You can use a digital wallet to pay online, in stores, or at ATMs without carrying your physical cards. 

A digital wallet may also hold other digital payment methods, tickets, or coupons. Here are the advantages and drawbacks of using digital wallets as digital payment solutions.

Business banking reimagined for small business

Fast payments, high-yield savings, and custom forecasts - powered by QuickBooks.

QR code payments

QR code electronic payments are a method of transferring money using a two-dimensional barcode that you can scan via smartphone. You can use QR codes in various applications, such as online shopping, mobile banking, and loyalty programs.

$2.4 trillion was generated through QR code payments in 2022.

The QR code is one of the new payment methods that strive to be more inclusive and accessible, as they do not require a bank account or a credit card. Pair a QR with a digital wallet, or lead the buyer to another form of digital payment processing. 


An electronic check, or eCheck, is another form of digital payment. Money gets withdrawn from the buyer’s checking account, transferred over the ACH network, and deposited into the business’s account. 

This differs from taking a picture of a paper check and depositing it using your mobile device. With an eCheck, the buyer must authorize payment transactions via a contract, accepting terms and conditions.

Small businesses that could benefit from accepting eChecks include those that accept recurring payments. Think of landlords or daycare providers who receive payments monthly. All the customer has to do is authorize recurring eCheck payments, and those fees can get taken out automatically each time.


Cryptocurrency is a type of digital currency that operates on a decentralized network of computers, using blockchain technology to secure transactions and verify records. 

Crypto is a part of the decentralized financial movement and supports peer-to-peer transactions without the need for centralized banks or financial institutions. You should consult with your financial advisor to see if accepting digital assets is suitable for your financial situation.

Benefits of digital payments

A graphic shares the pros and cons of using digital payments in 2023 and beyond.

New proposed list:


  • Financial inclusion 
  • Speeds up payments 
  • Increased convenience 


  • Security concerns 
  • Reliance on technology
  • Service charges and fees 

Digital payments can be an important tool in helping business owners get paid faster and more efficiently– improving cash flow. Digital payments are convenient solutions for businesses and customers because they can:

  • Promote financial inclusion by creating more accessible payment methods for your customers.
  • Get paid faster by reducing the time it takes for your payments to be processed.
  • Enjoy the convenience of cashless transactions while improving the buying experience for your customers.

Digital payment services can provide you with live payment records in real time and pair well with live bookkeeping services to ensure that you always have the latest information at your fingertips.

By 2025, experts predict that 125 million Americans will use digital payments.

Challenges of digital payments

Digital pay might seem like a no-brainer solution for your small business. Although digital payment services can potentially be more convenient and cheaper alternatives to physical payment methods, they also have drawbacks such as:

  • Security risks: Like all electronic functions, digital payments are subject to cybersecurity risks and fraudulent activity.
  • Technical issues: Digital payments usually require a charged electronic device with an internet connection.
  • Service charges: You may have to pay an extra fee for the convenience of cashless transactions.

Remember these extra fees and risks as you work with your business advisor to implement a digital payment system into your small business.

Only 38% of banks invest in cloud systems for payments.

Choose the best payment setup for your business

The next time your small business accepts a payment, consider how the transaction could benefit from digital payments and contactless transactions. 

Whether your focus is B2B or B2C, electronic payment methods can help reduce costs and increase customer engagement. Consider integrating cashless payment options into your existing payment methods. 

Although there are plenty of effective accounting methods to try, with QuickBooks, you can automate how you manage your business money and payment options– all in one place.

An infographic shares the basics of how digital payments operate.

Digital payments FAQ

**Product Information: 

QuickBooks Payments: QuickBooks Payments account subject to eligibility criteria, credit, and application approval. Subscription to QuickBooks Online required. Money movement services are provided by Intuit Payments Inc., licensed as a Money Transmitter by the New York State Department of Financial Services. For more information about Intuit Payments' money transmission licenses, please visit https://www.intuit.com/legal/licenses/payment-license

QuickBooks Card Reader: Data access subject to cellular/internet provider network availability and occasional downtime due to system and server maintenance. Product registration and QuickBooks Payments account required. Terms, conditions, and features subject to change. Apple Pay: Apple Pay is a registered trademark of Apple Inc. Google Pay: Google Pay is a trademark of Google LLC. PayPal and Venmo: Not currently available on invoicing through QuickBooks Online Advanced subscription. Venmo is available only in the US.

Recommended for you

Mail icon
Get the latest to your inbox
No Thanks

Get the latest to your inbox

Relevant resources to help start, run, and grow your business.

By clicking “Submit,” you agree to permit Intuit to contact you regarding QuickBooks and have read and acknowledge our Privacy Statement.

Thanks for subscribing.

Fresh business resources are headed your way!

Looking for something else?


From big jobs to small tasks, we've got your business covered.

Firm of the Future

Topical articles and news from top pros and Intuit product experts.

QuickBooks Support

Get help with QuickBooks. Find articles, video tutorials, and more.