The benefits of cashless payments

With the rise of contactless payments, most customers these days expect their business of choice to offer cashless payment options to enable smoother transactions. The right option for your business can also help improve sales and maintain steady cash flow.

Key business benefits include:

  • Customer convenience: Many people simply don't carry cash anymore, so they tend to walk away if there's no way for them to pay.
  • Lower costs: Digital transactions save time handling, counting and processing cash or cheques, which can reduce your overheads.
  • Reduced security risk: Less cash on premises helps reduce theft and security risks.
  • Efficiency boost: Cashless payments encourage faster in-store and online transactions.
  • Cash flow: Accepting card payments can encourage debtors to pay faster, as they don't need cash on hand.
  • Sales strategy: Research shows customers tend to spend more when paying with cards instead of cash.

There can be some drawbacks

Like with any tool for your business, it pays to know the pros as well as the cons. Every business has a unique financial structure, so get smart advice on the cashless systems that are most likely to deliver on customer experience and your bottom line.

Keep an eye out for:

  • Reliance on technology: Cashless payments won't work if the internet is down, during a power blackout or when your bank or financial institution has an outage. Have a backup plan that may include sourcing cash for change, and manual card transactions and receipts.
  • Fees: Costs can vary across providers and payment models. Check if the payment fee you're charged is built into your pricing strategy, so it doesn't eat away on your profits. 
  • Security risks: Cashless systems can open your business to digital and cyber security issues. Check your systems are protected by encryption and data authentication to safeguard yours and your customers’ sensitive information.

Choosing a cashless option to fit your business

Your cashless payment options can vary depending on whether you're looking to implement it online or in-store.

In-store cashless payment options

EFTPOS machines were the pioneers of the digital payment methods. They’re trusted by a majority of businesses and customers, but tend to come with establishment costs and monthly hardware rental.

Mobile card readers use an app to turn your smartphone or tablet into a credit card reader without the expense of an EFTPOS machine. But there's a chance the new tech isn’t trusted by all customers yet. Also, some apps are platform-specific, so you should be careful not to restrict your customers based on the type of smartphone they own.

Digital wallets like Google Wallet and Apple Pay are the new kids on the cashless payments block. Customers can pay by tapping their mobile phone against the card reader, but not all banks offer digital wallet payments just yet.

Online cashless payment options

Direct debit is convenient for customers and businesses. Just like EFTPOS, this requires your customer to have the cash in the bank to complete the transaction.

Online payments via gateways like PayPal give customers more choice in how they pay online, e.g. via credit or debit card. Some gateways charge monthly, others as a percentage of the transaction.

If you're using an online payment gateway, look for providers using two-factor authentication (TFA). This adds an extra layer of protection by asking you to confirm your login on another device or with an authentication code.

Consider your pricing strategy

Whatever your cashless choices, the costs across EFTPOS hardware, credit card fees and payment gateway charges should be factored into your pricing strategy.

Value-based pricing lets you set the unit price based on the value of the product or service to the customer, regardless of the actual production cost or price history. Offering digital payments is one way to increase the perceived value and can open the way to setting more premium prices for your product.

Cashless payments are the new norm for business payments. Are you meeting customer demand or are your systems leaving money on the table?