7 Reasons you Should Introduce Cashless Payment Systems

Cash is no longer king. 

30 years ago, a world without cash was not possible. But, over the years, businesses have realized that dependency on cash can be tricky and risky. 

From not being able to record every transaction to theft/fraud or even providing change to the customer, businesses need better solutions.  Whether you are a small, mid or enterprise based business, cashless payment systems are the future to improve business efficiency. 

In this post, we look into the leading reasons why businesses of scale can be seen adopting cashless payment systems. 

What are Cashless Payment Systems? 

Payment transactions that occur without physical exchange of money are referred to as cashless payments. 

They can be conducted online and in-stores via a point of sale (POS). Both, the payer and the receiver, use digital mediums to exchange money. This includes payments via direct bank transfers, credit/ debit cards, digital wallets, online payment portals and similar transaction modes. 

Why should businesses switch to cashless payment systems?

Cashless payments have widened the opportunities for businesses to enhance the customer experience offered and take control of their finances. Here are some of the leading reasons why businesses have been quick to embrace this change: 

1. Helps increase sales and revenue

‘Swipe, Tap or Scan’ has become extremely common as we move towards a cashless society. Customers prefer to carry their phone or credit/debit cards rather than the cumbersome wallet filled with cash.

Businesses that only accept cash, inadvertently limit sales. Numerous and frictionless payment methods allow people to spend easily. When paying digitalls, customers tend to spend more, leading to higher revenue. 

2. Helps increases convenience and saves time

Cashless payment systems save time. They can be 6x faster when compared to cash transactions, reducing the average transaction time from 90 seconds, to just 15 seconds. 

Shorter lines encourage people to buy that extra drink or shirt, resulting in a positive customer experience and retention. When Atlanta’s Mercedes-Benz Stadium went cashfree, there was a combined 16% increase in food and beverage spending at Atlanta Falcons and Atlanta United games. 

This leads to improved revenue and higher customer lifetime value amongst customers. 

For business owners, in-store cashless payments allow tracking of incoming and outgoing funds. This saves time and comes handy while filing returns.

3. Helps analyze data and generate insights

With cashless payment systems, you can gain insights into your business, to make informed decisions about evolving needs and preferences. 

All transactions can be used to segment your customers, based on payment volume or payment type in specific periods. 

Data helps understand your customers preference and behavior patterns. This knowledge leads to targeted product launches, offers and overall customer satisfaction. 

4. Helps with increased security during transactions

Cybersecurity in cashless payments, has taken off one more worry off the consumer and retailer. Cashless payment solutions help eliminate the risk of theft or fraud. Here’s how: 

• Digital transactions are secured with varying levels of encryption and data authentication
• With most payment modes, enabling two-factor authentication (TFA) adds an extra layer of security 
• Customers can activate geo-blocking features that restrict transactions in certain countries to prevent fraud
• All data collected from digital transactions is protected against use by third parties. No personal information can be disclosed without permission
• All digital transaction methods provide SMS and email notifications; and statements for users to track their funds 

5. Helps to lower operating expenses

Cash management is neither easy nor cheap. 

Storing, transporting and depositing cash funds is a task by itself. Moreover, you need additional training for employees to manage cash payments — and you cannot discount the scope of human error. Building additional security to keep your funds safe like lockers, cameras, sometimes even armored trucks (when transporting huge amounts of money) is an expensive affair.

SMBs can cut unnecessary expenses with digital payment solutions. Bill Walsh, VP of Tampa Bay Rays, said “We’ve seen some pretty substantial operational savings from not having to manage a large footprint of cash in the building. The team saved $150,000 in operating and manpower costs.” 

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6. Helps to enhance accounting accuracy and efficiency

Digital payments can increase transparency and streamline management. Digital transactions make accounting accurate and faster; as compared to manual efforts. 

For retailers, there is a clear paper trail, and no risk of vendors/employees under-reporting sales. Payments made by customers or to vendors can be easily tracked without sifting through physical records.

Cashless payment systems can reduce the time spent on accounting and reconciling at the end of the sales day, which allows you to focus on other aspects of the business. 

7. Improved customer experience for customers

Based on the study by Visa, cashless payments, mainly via e-wallets (52%) and contactless card payments (44%), are growing rapidly. Customers prefer new payment methods such as Buy Now Pay Later (BNPL) solutions (63%). 

This is particularly evident in categories such as bill payments, supermarkets, retail shopping, purchases at convenience stores, and restaurants. 

Plus digital payment adoption offers benefits to consumers. These can be in the form of cashback, points, or vouchers. On the other hand, cash payments offer no such additional value, hence customers prefer making purchases via digital means. 

By enabling cashless payment systems, you improve the customer experience and the value gained from your business. This encourages shoppers to buy and stay with your brand rather than the competition. 

Conclusion 

The benefits of cashless transactions cannot be ignored. It has changed the way people conduct business around the world. From malls to restaurants and eCommerce stores, most businesses have opted for the smarter and efficient method of digital payment systems. 

The plus point is that it is not difficult to establish cashless payment solutions. 

With comprehensive payment solutions like PayBy, it is also easy for businesses to get started with cashless payment systems. From the smart point of sale systems and scan-to-pay QR codes or online gateways; all solutions are designed for businesses of different sizes with different needs, to grow and succeed. 

‍Book a demo today to know more.