Cashless forms of payment are becoming more and more popular. As a business owner, you must have an understanding of what the pivot towards a cashless society means. Keep reading for the pros and cons of cashless payments.
Cashless payments in business can help avoid petty theft. If business premises do not hold any cash, you are preventing this type of crime. Larger financial crimes are also avoided easier with the clear and automatic paper trail electronic payments come with. This makes funds easily identifiable and any fraudulent activity is therefore much more difficult. There are several benefits to a cashless payment system, both for businesses and customers.
Cash flow can be monitored easily because all payments come into and go out of a bank account. This can significantly reduce errors. Cashless payments also make international transfers easier. This means you can expand without having to worry about exchanging cash payments into your currency.
Establishing cashless payment methods helps save money on storing and depositing funds.
Lack of privacy can be an issue with digital payments. Some customers may be reluctant to give away the data required for eg online payments. Of course, if you are deciding on digital payment methods, you have to ensure good security systems are in place. Without one, there is a danger of your bank account and sensitive information being hacked and leaked.
Cashless payment options also rely on electricity - so any power outages will stop your payment system from working. This can lead to the business having to close its doors temporarily and losing customers.
When choosing your payment provider, do ensure no unreasonable fees are being charged for cashless payments.
Cashless payments - explained
Cashless payment systems transfer funds automatically from one bank account to another. There is several different types of cashless payment systems:
Credit and debit cards
Credit and debit cards are the most popular and longest-standing form of cashless payment. The payee presents their card or enters card details. Credit card companies often charge fees for card payments.
Mobile payment services
These are a form of cashless transactions that have become increasingly popular in recent years. Mobile wallet or payment services allow a customer to pay by tapping your phone on a sensor.
Electronic payment apps
Apps that allow customers to send electronic payments are becoming more and more popular, particularly for person-to-person payments. The most well-known electronic payment app is PayPal.
Cashless payment systems
When choosing the cashless payment system for your business to use, there is a couple of things to look for: positive customer reviews, a user-friendly fee system, fast transfer, a central dashboard for transfers, the ability to track sakes in real-time, and track invoices as well as the ability to take multiple types of customer payments.