Many years back, you walk into a bar, and the first thing you see is the signage: Cash only. Chances are, this is no longer the case in some establishments you frequented. Particularly with the coronavirus, and the pandemic is still raging. Things are now upside down. The signage we now see is: Cashless payment please or Cashless payment only.
That is out of fear that cash can harbor the virus on its surfaces. With the refutation of cash of having many exchanges of hands, it is an option we all wanted to eliminate.
There are already credit cards and debit cards to deal with this. However, others prefer cash over cashless transactions.
Just What Does It Mean by Going Cashless?
Living in a cashless means living where all the financial transactions are in digital form rather than exchanging physical banknotes or coins for goods and services.
Moreover, unlike traditional cash, where we can see the physical representation of the currency, which almost all countries have their respective banknotes and coins, going cashless is safer. That is in light of the pandemic, where this virus can live on any surface, including banknotes and coins.
Types of Cashless Payments
Cashless payment transactions come in many forms. Here are the types of cashless payment:
Banking cards are the most commonly used cashless payment method around. This is your debit and credit card. This usually has the logos of either Visa or Mastercard or the like.
That is the preferred mode of payment for online transactions and PoS machine payment.
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Mobile/Digital Wallet Apps
With Smart phones being part of our lives, it is only logical that mobile applications find their way to receive, send and store money. This is also the most convenient way to pay various bills without the hassle of physically going to the brick-and-mortar locations.
QR is an abbreviation for Quick Response. It is usually an arrangement of two-dimensional code on a square grid. Hence, smartphone cameras usually read these QR codes. To use this method, buyers need to scan the merchant’s QR code to complete the transaction.
This also goes by the name of Tap-to-Pay. Here buyers simply tap near the merchants’ Point of Sale (PoS) terminal, and the transaction is done. Ultimately, this does not require any signature and PIN.
Meanwhile, the electronic clearance service (ESC) is mostly for bulk payments, paying off for utility services, disburse payments like dividend interests, pensions, salaries, and equated monthly installments.
Gift Cards or Vouchers
Besides having the convenience of going cashless, gift cards and vouchers, various. In particular, merchants give discounts when in use.
The traditional PoS terminals have now evolved and can now accept cashless transactions. This mode of payment has many types too. We now have virtual PoS, physical PoS, and mobile PoS more. So, this eliminated the need to purchase expensive register machines.
Things to Consider If You Want to Have a Cashless Payment
So, it is not a matter of location alone; what are the things that can affect the implementation of a cashless payment system? Here are some factors:
Type of Business
This falls whether the nature of business is rooted in technology or not. When it is so, it is the right idea to use the latest trend like BYOD, instant collaboration, and cashless payment. But if your business is bound to something other than technology, it will be good to adopt, but if it is not appropriate or, a hybrid is best.
As mentioned earlier, market demographics play a crucial role. That is because some customers prefer cash over credit and debit. Plus, not all have access to either, like immigrants in the US, minors, teens, and even the elderly. However, you should get ready to gain more customers and lose some of your customers.
Resources of the Business
Speaking of sticking with your guns, it all depends on the company’s ability to ride the wave or catch the wave. However, if it is still more beneficial to use the old and trusted method, use it, but when it comes to capitalizing, seize the opportunity.
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Where there is human intervention, there will likely be human error—also, the likely hood of having fraudulent transactions. With virtual payments, like CloudBanking, errors, theft, and tax frauds are a thing of the past.
A good sample of a business that is subscription-based is Netflix. It is a multi-national company, but you do not pay their services over the counter, yet it is a multi-million-dollar business. All we need to do is pay through some online payment option.
Benefits of Going Cashless
Besides shielding you from the potential threat of exposure from COVD-19, going cashless has other benefits. Here are the following:
- Reduced business costs
- Eliminate the risks of theft and other crime
- A deterrent against corruption
- It speeds up transactions
- Had a reliable, accurate report on a financial report
- Economic data is compiled better
- International payments made easy
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Going cashless is the natural progression of business transactions. It is its next step in its evolution. That is something that we will encounter whether there is a raging pandemic or not.
We first started with the barter system, where we exchange goods and services for roughly about the same. Then we have the fiat currency, where almost every nation has its own printed and minted currency.
Furthermore, as we live in a globalized world, it only fits for cash to evolve. Here a unified currency is the next step. We see this at a regional level, as the Euro currency. It is important to realize that almost the whole of Europe uses this currency.
Moreover, the next logical progression of the saga of business transactions is going digital, and the world will follow. Given the immense influence of big businesses like the tech giants, it is only a matter of time. It is not a question of if we go digital; it is rather a question of when we will go digital. CloudBanking is one option and is a step in the right direction.
Ashley Halcomb is a researcher and a freelance content writer for CloudBanking and Switchconnect. She is an ongoing learner and always curious to learn new things. She uses that curiosity, combined with her experience as a freelance business owner, to write about subjects valuable to merchants on the CloudBanking and Switchconnect blog.