The logistics industry is growing, especially after facing a slowdown in the last two years. While the global marketplace is in constant flux, shippers are always searching for new ways to streamline the supply chains and improve logistics efficiency while saving money. Whether they’re trying to navigate tariff changes, understand customer preferences, or whittle down high transportation bills, shippers are using various payment processes to eliminate paperwork, phone calls, and emails and adopt a more streamlined, tech-enabled approach.
In the logistics industry, speed, efficiency and accuracy are crucial elements. For a long time, both large and small logistics businesses used the manual system of tracking payments and orders. This process was cumbersome and slow, and the possibility of payment records getting lost or mishandled was also a concern that would result in excessive time consumption. But with supply chain financing, which is developed on technology platforms, both buyers and suppliers get the opportunity to optimize their cash flow.
Let’s evaluate some of the popular payment trends in the logistics industry that benefit every stakeholder.
Mobility as a Service Driving the Logistic Sector
The modernization of the payment method has played a very influential role in the efficiency and management of logistics companies, especially in India. Today the use of cards has just become a small portion of the payment systems as the mobile payment solutions have seen an incremental rise in the last two years. With mobile and digital wallets, smartphones have become full-fledged payment machines widely used in the trucking industry.
The mobile payment solution is a convenient and secure option. While using the mobile browser, payments can be done easily and get safe access to the online checkout. Later the amount gets charged directly to a mobile phone bill. Apart from mobile wallets and NFC (Near Field Communication), the use of in-app payments systems in logistics firms is also proving beneficial as they allow buying and selecting products and services from within the closed ecosystems.
The mobile payment solution is a convenient and secure option. While using the mobile browser, payments can be done easily and get safe access to the online checkout. Later the amount gets charged directly to a mobile phone bill. Apart from mobile wallets and NFC (Near Field Communication), the use of in-app payments systems in logistics firms is also proving beneficial as they allow buying and selecting products and services from within the closed ecosystems.
Use of Smart Cards to Streamline the Purchasing Process
As per a recent research report, with constant new developments, especially in the transportation sector, the global smart-card market size is estimated to expand to $75 billion by 2026. Contactless smart cards that use a chip based on RFID technology are most suitable in the transportation sector. Procurement Cards, also known as P-Card, are most commonly used for buying. They ensure cost efficiency, control, and convenience and can be tied to a credit card or bank account directly. Later the bank issues the payments to suppliers against purchases and provides regular invoice documentation to the organization. This increases the efficiency of the purchase order process as fewer employee hours are required to review documentation and invoices and issue cheques.
Similarly, Fleet Cards are also trending in the logistics market to cover transportation costs and are provided to the personnel responsible for getting goods from one point to the other. This card can also be used for fuel as well as vehicle repairs and maintenance. Since fleet cards automatically provide oversight of the calculation, it simplifies the transportation accounting process.
Simplifying Accountant Process with Digital Payment Systems
Digitizing the tracking, invoicing, and collection of payments greatly improves the payment experience for both sides of the transaction. It eliminates operational limitations and enhances work efficiency. By using a digital payment system, it becomes easier to collect money, analyze more payment options, and ensure minimal errors or loss of receipt.
The benefits of digital payments in the logistic industry go beyond safety or reduced risk of transmission. It includes contactless payment systems such as debit/credit cards, UPI-based payments, net banking, etc. that have been game-changers. The transitioning to digital payments not only speed up day-to-day operations but also lightens employee loads and ensures that every important detail is accounted for throughout the supply chain. Additionally, digital payments have also enabled an efficient process with the e-toll system that automatically calculates the charges according to the vehicle’s assigned route, bringing the logistics industry a step closer to facilitating contactless logistics.
There’s More to Come
The global supply chain industry is poised to take full advantage of the very best technology for all aspects of shipping. Doing so will not only reduce human effort but also improve efficiency, safety, and tracking capabilities in the logistic industry. With automated payments, real-time data analysis, and a contactless digital payment system, the shipping industry can ensure that every transaction is accounted for without any hassle or error. The landscape of the logistics industry, right from transportation to the last-mile delivery, will continue to transform with the evolution of technology in the future.
This article is authored by Oomkar Kulkarnie, Head – Product & Technology at 1Pay – a fintech company offering programmable payment solutions to the logistics and transportation industry among others.
