2021 sure seems like the year where it is in a standstill- what with us still being in lockdown. A cashless society further evolves through this pandemic. We cannot step out of our house and handling cash is a big no-no during these times. As such, any payments during this time should ideally be made electronically.
Currently, debit or credit cards are the preferred alternatives to a cashless method. However, digital wallets through mobile devices are becoming increasingly popular as it brings even more convenience to people and may soon become the primary option for payments in the foreseeable future.
Some people have argued that we aren’t ready to go totally cashless.
The big question is, should you?
In the interest of helping you decide what’s best for your business, we have compiled a list of pros and cons of going cashless.
PROS
1. Expedites Checkout Process. With cashless payments, checkout lines will be significantly shorter. We as customers no longer have to deal with impatient people breathing down the backs of our necks as if it is our fault the lines are so long.
Going cashless eliminates the need to dig for coins or dig through wads of cash at the cash register as this is one of the main reasons why people take forever to pay. Now, customers only need to scan their phones or use their cards- checkout processes can be accelerated.
2. Painless Accounting. Going through your books manually to determine what went wrong is tedious work. Not to mention the probability of making a mistake in the process. Errors are inevitable when work is done by us humans. By going cashless, everything is digitized and each transaction is automatically tracked and recorded. This makes the accounting process significantly more accurate.
3. Fret Less About Risks. Cash businesses would naturally be more prone to theft, exposing employees to unnecessary security risks. Old timers who run small businesses are often reluctant to switch to cashless payments as they do not see the need to- that is, until their money gets stolen. Learning the hard way and finally transitioning to a cashless method can safeguard the business’ assets as there is no tangible money to steal.
4. Getting Insights. Whenever a cashless transaction is made, data is collected- be it purchasing habits or spending trends. These data are vital if you want to make strides in your business. Gaining insights and analyzing data collected is a necessary step to develop better marketing strategies.
5. Attract Customers That Carry Less Cash. Millennials would usually opt for a contactless method when purchasing items. The younger generation would be more inclined to support your business is you portray yourself as a tech savvy business.
6. Prevents Spread of Virus. During these trying times, touching objects mindlessly should be out of the question. Contactless paying should be people's first choice when purchasing items as handling cash just means the virus will be having a field day spreading from one person to another.
CONS
1. More Fees More Problems. As businesses are required to pay a certain amount of fees for each transaction made by card, additional fees may be built it into the prices. This would potentially mean losing customers to your competitors with lower prices. This is the reason why some small businesses still choose to accept cash only.
2. Technology Isn’t Flawless. Let’s face it: technology can fail at any given time. Cashless systems are no exception. If a system outage occurs and you cannot fallback onto a cash option, the worst-case scenario would be a loss of revenue. That being the case, ensure that paying with cash is still an option.
We’re all not foreign to banking issues when shopping online. The banks will somehow always be facing maintenance at the worst times, causing us customers to be frustrated. This kind of unpredictability is common when dealing with technology.
3. Cashless Is Not Well Received By Everyone. Although we cannot deny that many customers these days prefer taking the cashless route, there are still a handful who prefers making their purchases the old school way. They may wish to keep track of their expenditure, or are simply accustomed to paying this way. If your business is strictly cashless only, these customers will feel left out.
Transitioning your business to a cashless system is like treading on thin ice- you have to ensure it is done carefully because if these customers feel they are being discriminated, you may end up losing them and you’d want to avoid that at all costs.
There will be a time – I don’t know when, I can’t give you a date – when physical money is just going to cease to exist. - Robert Reich
FINTECH RAKYAT helps businesses migrate to the next generation of the Digital Age. Our Business Operating System: HIVE BizOS is a comprehensive package of custom back-end and front-end solutions, designed to allow you to modernize your business quickly and effectively.