The number of businesses switching to a cashless payment model has been trending upward in recent years. According to Capgemini, cashless payments in 2016 reached $486.2 billion, with a forecasted growth of 21.6% globally through 2021. Additionally, the number of cashless transactions in North America has reached 161 billion with little sign of slowing. With cashless payment policies solidly entrenched in the business world, now may be the right time to examine the cashless business pros and cons so you can make the right choice for your business.
Before taking the plunge, it is important to conduct a thorough examination of your business operations to see if going cashless is the right path for you. At a minimum, you should assess the readiness of your:
- software systems
- point of sale solution
- click and collect or delivery software
- customers’ willingness to participate
These are central factors in considering whether to make a switch. With a few other key points of discussion you will be better prepared to make the best, and most informed decision possible.
Identify your benefits and drawbacks for going cashless
How do you know if your business is ready to go cashless? Checking on the legality of being cashless in your area is the first place to start. Once you have cleared that hurdle, there is a social consideration at play as well. The premise of restraints on businesses moving to become entirely cashless is that those from lower economic rungs are hurt by cashless establishments, as they may limit their shopping and dining choices. You will want to remain sensitive to any potential PR issues, taking a “know thy customer” approach.
The industry in which you operate is another key consideration when thinking of going cashless. Some industries, such as fine dining or boutique retailers, see very few cash transactions while other industries, like quick service restaurants and food trucks, may deal primarily in cash transactions. If you discover that your industry isn’t conducive to eliminating cash entirely, you will need to rethink a cashless strategy to avoid a negative impact on your bottom line.
There are technology concerns here as well. A traditional cash register and card reader setup will prove to be inadequate for a cashless business. Modernizing your point of sale solution is a must for a cashless operation in multiple ways.
First is payment processing and acceptance. Given the wide variety of payment options – from EMV and swipe cards to touch-pay options, and digital wallets like Apple Wallet and Google Pay – you must be ready for as many cashless options as possible. An updated ePOS system also helps to gain the support of your staff, as you can easily track tips, timekeeping, shift schedules, and commission royalties if applicable. This creates a forward-facing interaction with the customer that is crisp, sleek, and easy to use.
Gaining customer buy-in
Perhaps the most important decision-making point, outside of the legalities of making the switch, is the opinion and support of your customer base. It’s important to predict how your customers will react. Ask your regulars for input on this topic before you start implementing a cashless policy. Additionally, there are a few other pieces to address before announcing your intentions to go cash-free.
- Keep the lines of communication open. This critical step is often overlooked. If it appears that going cashless is a good fit for your operations, it is important to get this intention out into the world as soon as possible. While customers may balk initially, this gives them some time to grow accustomed to the idea and reduces any angst about the process.
- Forgotten payment card or phone? Allow your clients to open and manage a prepaid account. Or even better leverage your ePOS technology to generate mobile and web-based payment options. This reduces the chances of customers leaving empty-handed because they grabbed the wrong wallet or purse.
- Transparency around transaction and security policies. You must implement and maintain a concise, easy to follow policy around how you plan on securing and storing your clientele’s valuable purchasing data. This should be easily accessible by the public and updated regularly to reflect any changes.
- Consider the potential social issues. The last thing you will want is to be seen as a potential example of social wrongs in your community. Consult your neighbors and clientele about how moving to a cashless operation will impact your local economy.
Going cashless is a sensitive operation and it’s important for you to get it right early on. You need to not only maintain transparency over data management and payment processing but also factors such as how to handle an internet or power outage and retaining payment processing service across multiple payment options. These will be key in winning over the crowd.
Do you need extra layers of security to go digital?
If you hear the phrase “digital payment” and the first image that comes to mind is a hacker in a ski mask furiously typing away at a computer, transaction security will be your best friend. While a key pro of going cashless is better physical security in the form of a lower risk of theft, digital security must be addressed if your cashless initiative is to be successful. A next-gen POS solution can provide you with this enhanced security, and thanks to many solutions offering cloud-based storage, you can move client records from the backroom computer to the cloud.
This can also provide an opportunity to secure your transactions through the selection of a new payment processing provider. While many of today’s POS systems include payment processing as part of the package, you’ll want to compare your options. Avoid lengthy or strict contracts so you can retain the flexibility to choose a new provider as needed. Also, as the world of digital payment options continues to grow, you’ll need the flexibility to accept new payment options. This means that your payment processor must keep up or give you the option to move your transactions elsewhere if they cannot.
Obtain expert analysis to ensure cashless is right for you
Enlisting the help of an professional is crucial for determining if your business is ready to go cashless. Find out more about the U.S. Bank talech point of sale solution and how it can offer powerful business management capabilities, while delivering safe, secure payment acceptance.
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