Would you prefer to live in a cashless society where all transactions are done electronically, with paper money vanishing completely? During the annual survey from Diary of the Consumer, it was discovered that only 19% of payments in 2020 were done in cash. These numbers are 7% lower than those of the 2019 survey. Without forgetting the pandemic’s impact, we still see an unusual increase in the use of cashless payment methods. Data on different factors gives us more insights. We have to consider how to regulate and execute payments between consumers and merchants. All tools have been already come up! Payment processing providers facilitate this task. POS terminal, website purchasing form, mobile application to confirm paying, etc. — all these modes go with payment processors. The market of fiat money was a consistent ground in relations among merchants. And it isn’t easy to imagine that after thousands of years of existence, it will stay just as history, and only for several decades, we have become cashless.
Factors Confirming the End of the Cash Era
To properly analyze the situation, we must touch on three crucial factors that occurred this year to affect a cashless society. But first, what exactly do we mean by a cashless society? A cashless society means just digital payment methods, such as Venmo, Apple Pay, Cryptocurrencies, etc. Paper money and the pandemic The pandemic incentivized the development of digital payment that replaced fiat money. Banks applied protective methods to avoid the paper money from transmitting the virus, and while they suggested using digital techniques, some countries also began disinfecting their banknotes. The Federal Reserve even declared money quarantine.
Credit Card Processors will help you with the end of the cash era
Weird as it sounds, the pandemic stretched the limits of our cash-based systems. The fear of getting or transmitting the disease has been compelling enough for customers to start using plastic or digital payment methods. And as these methods enter as temporary solutions, they’re likely to become permanent even after the pandemic ends. Advantages of implementing non-cash solutions The leading non-cash solution is payment processing. This innovative technology gives fantastic opportunities. Now it’s possible to sell to all countries of the world. Your physical location can be anywhere, and your client also can be from another continent. It doesn’t matter. Easily, in a few clicks, money will be on your account. Only imagine that there was an ability to go business locally not far ago. Earnings from abroad were complex and very inconvenient. Setting up a cash transaction system between two banks from different countries is a problematic query. And what do we have now? Due to modern technologies, the whole world becomes a client. The tremendous potential to scale! Even a brick-and-mortar store isn’t necessary — a web page with presentations of goods and a payment processing provider processor. These features are already enough to do a successful, profitable business. Businesses going cashless Even before the pandemic, businesses had committed to going completely cashless. The situation only accelerated the process. Companies such as Noodles and Company stated that it would accept only debit, credit, or gift card payments in all its locations in the U.S. Amazon Go brings a challenging vision for cashless stores: cashier-less stores. Last year the giant, which also owns Whole Foods, commanding a good part of retail sales in the U.S., tested ‘just walk out’ stores where customers could enter, scan their cards or barcodes to pay, and then leave. Earlier in 2018, Starbucks’ largest coffeehouse chain tested cashless payments in its Seattle location by launching an app for pre-orders. The test proved successful at handling transactions, and now the app has become quite popular, saving time for customers and increasing sales. Time is the most valuable asset. How exactly can reducing cash develop your business? Time — you will save a lot of time — is the most viable advantage due to the cashless method. You can imply it with payment processors that will make all the jobs related to digital payments. From the first to last step, it’s their area of responsibility. So if you have considerably more time, you will use it to make your business better, won’t you? Payment processors fulfill various functions and have a wide range of possibilities. You should detect each one of the whole processors’ amount matches you the most. First thoughts about payment processing and its providers can be alike that it’s only a business and has no efficient options for developing other companies. But it’s on the surface. Actually, there’re many worth features that can scale your business and save time. Let’s take such an illustration — a store with cash payments. This business owner should pay a cashier, hire a secure money transportation company, also a lot of costs are going on by an accountant. How much time is demanded to fulfill the whole process? — A LOT OF!!! The same owner avoids all these costs by the payment processor calling in. For and against of payment processing Five years ago, as reported by Square, 50% of consumers used their card for payments starting from $8. Now, they’ve started using it for purchases starting from $4.50. Pros — Customers are satisfied with an availability to buy your goods in their language, pay the method they prefer the most, and watch prices in their currency. — Processors support different ways of paying: prepaid cards, pay-later options, gift cards to buy-now, direct bank transfers. — Small businesses gladly involve payment providers because they’re not obligated to execute some requirements as minimal transaction numbers per month. They move in a convenient cadence. — When commodities sell abroad, payment processing includes currency exchange, and nobody needs to do it on their own. Isn’t that convenient to avoid this routine? — Global extension of customers’ market. Cons — Fraud activity in the cyber area. Hackers can damage your wealth. So, before agreeing with any first provider, you should check his reliability and ask how he can protect your account and finances. — Before your money gets to your account, it can be held for 30 – 60 days — settlement period. — Providers are separated into different niches, and it’s a piece of a time to explore them and select the best matches for a particular business. — Refund also takes time and depends on terms. It is possible to wait up to 3-10 days. But more often, this period is shorter. Some statistics As McKinsey reported, already in 2016, the quantity of U.S. consumers who use digital ways of payment reached 72%, and in 2020 this number grew up to 78%. The report of GlobalWebIndex shows that 58% — are internet users who prefer the mobile phone for internet shopping, and 40% choose PC. Statista survey shares us such indexes: in 2017, the value of the whole digital payments sector was more than $3trn; in 2019 increased to $4.7trn; in 2020, statistics show an index of $5.4trn; 2021 — $6.6trn. It is expected to contribute 37% of digital payments value in 2021 through mobile POS payments — nearly $2.5trn of the total value.
Benefit and Tips for a Cashless Start of Your Business
Payment Processors on a Small Business View.
For small businesses, matching providers exist that have special techniques and software to develop it. The first and basic idea for small entrepreneurs is to sell their products around the world. In your opinion, could the merchant himself provide a well-established system of payments with other countries? Any business will grow faster with a partner who understands its needs — a model of this business. Business owners should examine payment processing as a strategy from the first steps. Until now, businesses that have depended on cash transactions might find it hard to envision having all their processes done without cash exchanging. However, the process is more straightforward than it’s presented.
- Prepare for the 2021-2024 transition period
The enormous transition is about to happen in the next three years. Prepare to adapt your business during this time. Otherwise, you’ll risk being left behind. Sweden is the first nation to go 100% cashless by 2023.
- Consider regional regulations
It will take time until all countries adopt cashless solutions. Before considering cashless payments implementation for your products or services, examine the legal regulations implemented in the regions you are targeting. For instance, the Federal Reserve has allowed businesses to terminate cash transactions if they decide to. Still, states like New York, Rhode Island, and Massachusetts are prohibited from transitioning into a completely cashless payment system.
- Never neglect security
We discussed the risks with which cashless payments systems come. Therefore, no matter how small, whatever change you perform, pay maximum attention to keeping the security systems up to par with the latest standards.
The Bottom Line
Not all businesses see cashless payments as reliable for their customer base, which is normal. Faster transformation means being steps ahead of the future and reaping its benefits. Cash operations lead to intricate payment processes with high costs in both money and time.
Establish your cashless system with the best credit cards providers
Despite slight drawbacks, the cashless system is progressive, and it leads to being a mainstay of a future economy. Cutting-edge technologies evolve and create more possibilities for different shapes of businesses. Indeed, if any company wants to grow, its owner should be attentive and have dense relations with payment processing providers.
