At the onset of the coronavirus pandemic, businesses and consumers started relying more heavily on cashless payment methods to reduce contact between customers and staffers. Cashless payments became more common, and people from small businesses to large corporations adopted electronic payment technology to ensure they could meet the demands of an increasingly cashless society.
If you’re a small business owner who wants to know more about cashless payments, you’ve come to the right place. We’ve compiled a complete guide to cashless payments, from contactless and credit card payments to cryptocurrency and online payment methods.
Keep reading to find out everything you want to know about cashless payment solutions and how they can work in your business.
A cashless payment is any financial transaction made without physical money — or cash. It encompasses credit and debit card payments, contactless payments, and online payments on any e-commerce platform.
In essence, customers paying for any goods or services without physically handing over money are making a cashless payment.
Cashless transactions became more common during the pandemic as people wanted to reduce the amount of contact they had with other people. Cash payments require close physical contact that was best avoided. Contactless payments, in particular, were a popular choice, as they don’t involve inserting a PIN code into a machine or signing a receipt.
As the effects of the pandemic wind down, however, cashless payments have remained popular, both for customers paying for items and the businesses selling them. Why?
For one thing, cashless payments are more convenient for customers and businesses. There’s no need for shoppers to go to an ATM to withdraw cash, and it’s often faster for customers to tap a contactless card to pay rather than count out dollars and wait for change.
Cashless payments can also be more secure, as cash is easily lost or stolen. Although credit cards and mobile phones can also be lost or stolen, it’s easy for customers to cancel a card and make it unusable. But with cash, once it’s gone, it is likely gone for good.
Credit and debit card payments can also make it easier for businesses to keep track of sales. Small businesses using point-of-sale (POS) systems to process card or contactless transactions can automatically track sales and other POS data, providing business owners with a clear overview of their profit margins and bottom line.
Any payment made without cash is considered a cashless payment — but there are four main types that you should be aware of as a business owner.
Card payments are probably the type of cashless payment that we’re all already familiar with.
Banks and financial institutions provide their account holders with a debit or credit card (like a Visa or Mastercard, for example) that they can use to pay for transactions.
Debit cards allow people to spend money from their checking account — the payment processor “debits” the account by the agreed amount. Credit cards, on the other hand, give customers credit to spend, which they must pay off each month or by a set date.
Contactless payments are another type of cashless payment. Shoppers can tap their debit or credit card on a contactless card reader, which processes the payment without needing a PIN code or signed receipt.
It’s also possible to make contactless payments using an NFC-enabled device. NFC (or near-field communication) technology can turn any mobile phone into a contactless payment provider. If a customer has a payment app on their cellphone, such as Google Pay or Apple Pay, they can make a mobile payment. The payment app acts as a mobile wallet that links to the user’s bank account and can replace contactless or credit cards.
Digital wallets like this are also available on other mobile devices, like smartwatches, so it’s easy for users to pay for goods on the go.
It’s impossible to shop online using cash, so e-commerce businesses like online stores must also accept cashless payments.
Online checkout systems usually accept a range of contactless payment options. Most accept online payments made by debit or credit card, where customers type in their card information, and a payment processor charges the card the correct amount.
Other digital payment options include PayPal, which acts as an intermediary between the bank and the consumer. Customers can link their bank accounts to PayPal, and PayPal processes the transaction (instead of the bank). Shoppers can also transfer money directly to their PayPal accounts for easier access when shopping online.
Cryptocurrencies like Bitcoin have become more prevalent in recent years as the fintech (financial technology) industry has expanded.
A cryptocurrency is a digital currency that lets people make online payments without using a central bank. It uses advanced encryption, making it one of the most secure forms of payment.
Most online retailers don’t currently accept cryptocurrency payments. Instead, people tend to use it for investing or trading.
If you want to accept in-store or online cashless payments, you’ll need to ensure your small business is prepared, and you have the right procedures in place. Here are a couple of tips to help you make cashless payments a reality.
Accepting cashless payments means you’ll need to upgrade your standard cash register to an all-in-one point-of-sale system. A POS system acts as a payment processor to enable your business to accept various cashless payments. A POS system comprises software (to process the payments) and hardware, such as a touchscreen monitor or a tablet and a card reader.
Self-service kiosks can also make it easy to accept cashless payments. If you run a retail store, you can use a kiosk app like KioskBuddy to turn a tablet into a self-service checkout. If you have a quick-service restaurant, you can use KioskBuddy to let customers place their own orders without additional staff.
The app synchronizes with your POS software and lets customers pay for orders in just a few taps. You just need a POS, KioskBuddy, and Square Kiosk hardware to process cashless payments.
Statistics show that cash payments in the U.S. have been declining, with more customers each year opting for cashless payment options instead. However, being entirely cashless can deter certain consumer groups from shopping at your store or visiting your restaurant.
A good solution is to offer both cash and cashless payment options. Customers who want to pay with cash can do so at a staffed checkout, while customers looking for the speed and convenience of self-service or cashless payments can do so at a self-checkout stand or traditional checkout.
As the use of cash becomes less common, small businesses must invest in the technology needed to accept cashless payments. Cashless payments are more secure and make it easier to track sales data. With the right POS, you can process various cashless payments quickly and easily.
KioskBuddy can work with your POS to turn a tablet into an easy-to-use self-service device, such as a grocery store checkout or restaurant ordering system. Customers can pay for items themselves using contactless or card technology.
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