Shop owner uses cashless payment.
According to the Harvard Business Review, cash only accounted for 30% of all payments in 2017. — Getty Images / Gerber86

The United States is quickly becoming a cashless economy. For the past couple years, the increase in credit cards and popularity of payment apps has caused a decline in consumer cash usage. In 2017, cash represented 30% of all payments, and the usage of cash for payments under twenty dollars has dropped from 46% to 37%.

COVID-19 has become a catalyst for cashless transactions with businesses only using credit cards and apps for contactless payment. And with 68.7% of United States households owning a credit card, businesses are finding that going cashless is worth the risk.

[Related: Guide to Contactless Payments]

Why go cashless?

Going to an exclusively cashless business model may seem risky for some businesses. However, there are many positive reasons for your business to consider going cashless, including:

  • Safety: On average, a $1 or $5 dollar bill changes hands from person to person about 110 times a year. By not handling cash, you avoid coming in contact with germs from other people. In the world of COVID-19, this helps protect your customers and employees from getting sick.
  • Efficiency: Counting out cash and giving out change takes time, which can slow down business. By only accepting credit cards and payment apps, transactions become quicker and more efficient, making your customers happy and giving your cashiers more time to handle more transactions.
  • Convenience: Having a cashless system is easier for your customers too as they don’t need to worry about having enough cash on hand for payments and don’t have to wait behind customers taking a while to make cash payments.

4 steps to making your business cashless

If your business is looking to go cashless, these four steps will help you prepare your business and customers for a seamless, contactless payment experience.

[Related: Cashless Commerce is on the Rise]

Offer multiple payment options

Unlike cash, which is universal in its usage, not everyone will use the same cashless option to pay. Make sure your business can accept payments through credit cards with magnetic strips or a chip, mobile payment apps and customer loyalty apps. This way your customers have multiple payment options and aren’t forced to use one specific payment type.

Despite high-profile security breach stories, contactless payment is safer than you think

Offer prepaid options and customer loyalty programs

In addition to offering contactless payment, add closed looped payments such as gift cards, prepaid cards and loyalty cards as other payment options. Not only does this give your customer more payment options, it will also establish a loyal customer base that will encourage them to return to your business.

Also, consider partnering with a loyalty payment app that rewards customers for buying your products and using your services. These loyalty apps use traditional retail tactics, such as digital punch cards, cash back offers, gamification discounts and other special discounts, to maintain a relationship with your customer.

Embrace new payment trends

Once your business makes the decision to go cashless, you’ll have to keep track of new payment trends. You never want to find yourself isolating your customers because you don’t offer their new preferred payment method. New technology such as payment fobs, biometric payment and Request to Pay services are future methods of contactless payment. While they aren’t heavily implemented yet, in a few years they may be as commonplace as credit cards and payment apps are today.

Prioritize security

One of the biggest concerns with a company becoming entirely dependent on cashless payments is the risk of security breaches. There are countless stories about businesses being hacked and their customers’ information being stolen. With cash, there is no risk – the buyer is anonymous. With contactless payment, they’re transferring data with their payment.

Despite high-profile security breach stories, contactless payment is safer than you think. EMV chip cards and credit card tokenization and encryption are two methods that are safer than traditional credit cards have been in the past. If your customer is confused or worried about their security, take the time to learn about these security measures to explain them and offer reassurance.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

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Published August 28, 2020