A growing trend from the past few years promotes businesses across the world going cashless. The transition may still sound drastic, but in many ways, it’s a reflection of consumer behavior. According to the most recent survey conducted by the Federal Reserve, paper money is barely used in 31% of American business transactions. Most of those purchases are of fewer amounts, with the average cash transaction ringing up at about $22. On the other hand, when talking about the debit cards; they have an average transaction amount of $44, while credit card transactions range around $57.
So, here’s the question rises, why is everyone moving towards cashless transactions? One of the big reasons for decreased cash usage is convenience. While carrying a wallet 24/7 full of cash may seem like a no-brainer to older buyers, but the 21st century’s generation typically prefers rapid payments. They like everything fast, and cashless payments allow them to swipe, wave, or tap their preferred payment method.
Before going into the comparison, let’s discuss some of the cashless payment methods. These days, credit cards are more widespread than ever; mobile wallets like Apple Pay and Samsung Pay are growing. It is also because countries all over the world are aiming to become a cashless society. They are accepting cards and trying to rid the world of paper money.
The Advantages of Going Cashless
There are a lot of significant benefits to adapting to a cashless payment model, including faster service, easier financial understanding, reduced risk of loss, and customer satisfaction who don’t carry cash.
Offer Faster Checkout Experience
Using paper money usually slows down the checkout process. And in this fast-paced environment, nobody likes to wait for the cash change. The competition is high, and it is all about how quickly and efficiently you can serve customers.
From your customer getting to their wallet, sorting through their bills, paying your staff members, paying for the supplies, and getting change, everything takes a little longer. Whereas, if you work on the cashless model, it is a much faster and more efficient alternative of doing business.
Another plus point is, when it comes to cash, there can be a lot of human errors associated with it. It can be giving out the wrong change, making mistakes in the cash notes counting, or entering the wrong details in the system. These issues can be completely removed if you move to a cashless payment system.
Easier Financial Management and Reconciliation
Counting up all of your cash at the end of the day, checking it against receipts generated, sorting it in the cash drawer, and taking it to the bank. UGH! It sounds hectic and takes time. Plus, you have to collect and maintain an accurate list of change for all your cash transactions. Whereas, payments received via credit and debit card transactions will be automatically reconciled and paid into your bank account in minimum time. The benefit you get, is the enhanced cash flow, fewer efforts while reducing the accounts overhead on your staff.
If you use a computer repair shop software, it keeps a log of every transaction in real-time, based on your sales. It provides greater insight into how your business is doing, right now.
Reduced Risk of Theft
Hopefully, your business has encrypted processes, and this won’t be an issue for you. But it is another very important advantage for small businesses. We all have heard about light-fingered employees lifting a little extra money from the cash register or foul playing. Therefore, moving to a cashless transaction system reduces the chances of losing money to theft.
Encourages Higher Spending
It is observed that customers spend more when they’re not paying with cash. Paying with a credit card or debit card is easier. You don’t have to come prepared with the exact amount of money in your wallet. It isn’t a big problem if they like something else and are convinced to buy it.
Because when a customer pays via cash, he sees the money going out of his hands, and it hurts! But when a consumer pays with a card, the hurt/impact is delayed since you won’t be asked to pay your bill for a few weeks. Also, cards with rewards encourage more spending.
Gives Access to Valuable Data
Because cashless payments don’t need to be recorded manually, they are safe, and their records are accurate. Whenever you would like to see the profit earned in the past year or want to see the best performing customers, go to the backend of transactions. Evaluation is made easier and simpler with contactless payments.
The electronic transaction data also provide you with valuable information and insights into customer preferences, spending habits, and buying trends, which can help guide your marketing and sales strategies. To make it simpler, try using a computer repair POS software. It keeps a report of all the transactions and organizes them. With a POS system, you can view all the customers’ card details, their purchases, taxes implied on each transaction, and profits earned in the result of going cashless.
Save Effort and Cost
While going cashless, businesses have to pay a fee for each credit card transaction, but on the other hand, they have to pay employees for the additional time it takes to accept cash. From checking the cash at the end of the day to making frequent visits to the bank and possibly paying security fees every time, these extra hours add up and cost you more.
When Sweetgreen, a big name in the restaurant industry went cashless, they published a remark explaining that a big part of the decision came from the ambition to scale up and the fact that they spent about two hours every day on cash administration in each store.
Cutting it short, the major benefits of going cashless are to reduce employees’ efforts and overhead, make customer service quicker and easier, lessen risk and human mistakes, and make your business engaging to more technically-minded customers. Reach out to ClymbPayments to get a free quote.