As the world marks the fresh rollout of a new decade, businesses are coming to terms with the reality of frontier technological revolutions. More startups and existing ventures are adopting modern systems to keep up with the growing digital, and payment processing solutions are not left behind.
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With more customers having a preference for diverse payment options other than cash, going cashless is no longer a luxury but an essential tenet for customer experience.
So, is your business ready for a cashless future? Here is all you need to know.
What Does It Mean to “Go Cashless”?
Going cashless is an economic concept where payments and transactions are conducted over digital systems instead of exchanging hard money. The implication is lowering reliance on physical cash like banknotes and coins to complete financial transactions.
Essentially, a cashless economy adopts multiple exchange methods to replace physical money, including internet banking, POS systems, cryptocurrencies, and credit cards. In this case, business transactions are run over payment processing solutions to accept cashless modes of payment.
It is almost hysterical to believe that cashless businesses were the order of the day before the invention of money as a medium of exchange. From the use of precious metals and valuables to the adoption of metal coins and checks, businesses handled their trades successfully without cash.
However, since the early 70s, as computers gained more processing power, the business sector took a new financial turn as magnetic stripe cards replaced any physical means of exchange. The technology has since evolved into the popular EMV Chips, a payment standard that applies metallic chips to enable all forms of smart payments.
Today, with a payment gateway and merchant account services, businesses can accept payments online and by card swiping.
Advantages of the Cashless Payments
More businesses are downsizing their cash usage in an attempt to increase contactless transactions. Here are some benefits of going cashless.
Quick and Convenient Transactions
Consumers have little time to spend in waiting lines and at checkout points. Anything that spares them the hustle is a definite channel to explore, and cashless payments are designed to serve that purpose. Payments are processed in seconds by swiping a card or clicking a button online.
Reduced Financial Risks
Keeping physical cash carries multiple risks, including theft, counterfeiting, and loss through disasters, such as fire. Going cashless mitigates these risks greatly.
Ease of Business Accounting
A merchant account keeps a record of all the cashless transactions completed by your customers. Interestingly, a merchant account creates an automated register to monitor your cash flow, reducing the chances of tallying errors.
The Downside of Cashless Payments
Cashless payments do not come without their setbacks. Here are some downsides of running a cashless business.
Technological Illiteracy
Older generations, especially those that are less tech-savvy, are always skeptical about new technology, including cashless systems.
Data Security
Payment processing solutions function by capturing and transferring user data across the cashless payment ecosystem. The possibility of a breach of personal data continues to raise great concerns among users and businesses.
Economic Inequality
Apparently, cashless modes of payment are not accessible to everyone. Running a full-fledged cashless business might induce a notable economic imbalance.
Merchant Account Risks
Your business will require a merchant* account to accept cashless payments. Unfortunately, if your business is considered high-risk by financial institutions, you might have to operate a high-risk merchant account. This type of account comes with increased costs and expenses.
How to Prepare for the Cashless Future
While cashless systems come with their fair share of complexities, the benefits of going cashless exceed the losses. As the world shifts into contactless payments, businesses must prepare for a cashless future to retain their economic relevance. Here are some tips.
Understand Your Customers’ Payment Preference
There are wide-ranging cashless payment options, but not every choice best suits your customer base. Analyze the habits and spending patterns of your customers to determine the payment channel that will give them a long-lasting impression.
Reward Contactless Payments
Rewarding customer behavior is the best way to maintain their spending patterns. For instance, you can award every cashless transaction a loyalty to encourage more contactless payments.
Diversify Your Payment Options
Offering more cashless payment channels increases your sales while boosting your brand’s credibility. Look for options that are commonly used and distribute them across your sale points. These include crypto, digital wallets, and internet banking.
Spread the Word
Let your customers know of your transition to cashless payments. Use signages, social medial posts, and traditional publicity models to inform your audience.
Choose Your Merchant Account Provider Wisely
While cashless payments are good for business, having an unreliable merchant account is as equally harmful. Consider such factors as PCI compliance, fees, customer support, and reviews to pick the best provider.
Conclusion
Global economies are shifting to contactless payments. And while cashless businesses attract potential risks, getting ready for a cashless future is a step towards retaining your brand relevance. However, you must keep in mind not to alienate unbanked and technologically unsavvy customers from enjoying your business services. The secret is to find a neutral spot between accepting contactless payments while allowing cash transactions.