Simplifying processes is a critical goal for some businesses. The simpler your daily operations are, the better. It reduces the chances of several mistakes, plus it makes running the company easier.
Related to this, some companies have been integrating cashless payment options to pursue a simpler collection method. Some still accept cash payments, but they prefer card payments or online payments through mobile apps.
Businesses operating in the digital market must use cashless payments no matter what. However, for companies with physical stores or shops, or using a combination of in-person retail and e-commerce, understanding the importance of cashless techniques is vital.
The Rise of Cashless Trend
Data shows that cashless businesses are becoming more popular over the years. In fact, only 26% of buying transactions in 2019 used cash; the rest opted to use online or card payments. When a shop decides to go cashless, it refrains itself from accepting physical money. It only entertains customers who are willing to pay with a credit or debit card or through a payment portal.
We are all familiar with credit cards. After all, people have been using them since the 1950s. Payment apps and debit cards, on the other hand, have made cashless transactions easier. Cashless payment programs are also constantly improving, making a cashless world possible in the future.
Some nations, including Sweden, have even made it their goal to become totally cashless soon. And while the rest of the world isn’t that ready to let go of physical cash yet, payment portals such as loanpaymentpro.com, PayPal, and online banking are making it more and more possible each day to stop using paper money.
So what does this mean for your business? In general, it would depend on the nature of your industry and how exactly switching to cashless payments will affect your operations and relationship with your loyal customers.
Advantages of Cashless Payments
Before you go cashless, it’s critical to understand the advantages in poses. Businesses that switch to cashless payments can save more time and invest that time in something else. Let’s take a look at the benefits one by one.
Eliminating Cash Processing Costs
Handling paper money comes with a cost. For example, some banks charge fees for counting and depositing coins. In addition, you may need to pay for armored car services to transport your money safely.
Many businesses spend thousands of dollars processing their physical cash, but those that implement cashless payments avoid these irrelevant expenses.
Efficient and Quick Transactions
Cash will force you to manage physical items. You need to hire employees to manage the cash register, give accurate change, and count collected money every day.
It would also be essential to have enough employees during peak hours to assist customers. And when a shop is loaded with buyers, everyone will feel the inconvenience of waiting in long lines to check out the items they want to purchase. The list goes on and on.
Cashless payments result in efficient checkout processes. It helps businesses make transactions quickly, and as a result, customers are satisfied and happy.
One of the riskiest parts of keeping physical cash is theft. Let’s admit it, cash is easy to steal, and once it’s stolen, it will be impossible to track where it went.
And while armed robberies and break-ins are a danger to your business, so are other forms of theft, like thieves who snatch cash from cashiers. And in some cases, your cashiers can turn out to be the thieves themselves.
Cashless payments do not need physical cash. Thus, there is nothing to steal.
Cashless payments will not just save you time during checkout. It is also beneficial to your other operations. Because of this, your bookkeeping tasks are easier to manage. Lastly, your employees will no longer spend time counting cash, balancing register drawers, or depositing the money into the bank.
Disadvantages of Cashless Payments
Even though cashless payments come with several advantages, they can come with critical drawbacks too. These cons are not easy to spot at first, but businesses should be wary of them once they start going cashless.
- Processing and transaction fees. Going cashless comes with a price too. For instance, credit card companies charge processing fees that are usually equivalent to 1 to 2% of the total purchase.
- Poor customer service. If you opt for cashless payments without understanding how it works, it might affect your relationship with your customers. Study the method first before diving in.
- Consumer exclusion. Not everyone possesses credit or debit cards. As a result, they will not be able to transact with your business.
- Technological issues. Technical problems might arise with cashless payments. There will be instances where your card reader will not work, or your poor internet connection will affect the entire checkout process.
Overall, any payment method has its own pros and cons. As mentioned, the benefits you will reap will depend on how you run your business and the current status of your payment methods. Try to understand all the advantages and disadvantages so you can figure out if cashless payments are suitable for your business.