Going Cashless: A Matter of Time | ApnaPay
cashless payment acceptance on POS device

Retailers and restaurants are slowly and steadily moving toward cashless operations. Debit/ credit cards and mobile wallets are replacing paper currency and coins. While futurists and sci-fi scholars have been foreseeing a cashless future for ages, consumer-driven businesses are following much more influential group of people, i.e., their customers.

The End of Road to Cash

The contentions for phasing out cash are influential. Cash is volatile and messy. It needs to be secured, counted, and deposited—an increasingly hard proposition. The printing of currency notes and maintaining their circulation additionally involve costs as far as paper used for printing these notes, inks, machines, etc. are considered, that are mostly imported and thus, the country incurs huge foreign exchange on this. Merchants also pay fees for cash deposits and for handling coins. The bottom line: cash costs money.

Cash also costs time. Reconciling total cash at the end of a shift and preparing it for the bank deposit takes away the valuable time from other business activities. Cash transactions are also slower, affecting the speed of establishments that depend on volume. Besides all these, cash is also an easy target for theft.

Weigh the Alternatives

Knowing all the disadvantages of cash, still some merchants are hesitated to go completely cashless for a variety of reasons—including the transaction fees. Each time a customer makes the payment with credit card, the card’s issuing bank withholds roughly two to three percent of the transaction amount and the rest is credited to the merchant’s account.

Merchants also fear that accepting more card payments will increase the risk of fraud. But fraud at point of sale is much less of a concern ever since EMV chip has been adopted. Data collected by Visa proposes that cases of counterfeit fraud dropped by 70% between December 2015 and September 2017 because of EMV’s adoption.

Most of all, merchants are concerned about leaving out customers. Some feel that they should never turn away business and, if they say no to cash, they will lose the cash-dependent customers as well as the transactions.

In addition, the unbanked customers have no access to credit or debit cards, thus, excluding them from cashless businesses. The most recent Global Findex 2017 Report estimates that approximately 190 million adults in India were unbanked in 2017.

When and How to Make the Transition

Despite the several concerns, clearly the push to go cashless is growing. Economics and technology are pushing businesses in this direction. So the primary challenge for the individual businesses is not determining whether to make the transition, but when and how to make this transition.

Are the Customers Ready?

A good first step is to assess customers’ current usage pattern of cash versus cards. Taking note of the volume and value of cash transactions as a percentage of total sales over a month’s period can provide a baseline. This will provide a rough idea of the practicality of going cashless.

These insights may propose specific strategies to alter customer preference to cashless methods of payment. Businesses should talk to their customers to discover why some use cash for their purchases and ask whether they are averse to going cashless.

A Smooth Transition

However, switching to only cashless payments is not something a business should implement overnight. A graduate progress will provide sufficient time to educate customers while giving staff enough time and opportunity to adjust to new processes.

Become a Card-Only Ambassador

Benefits of going cashless for customers should be stressed enough and communicated efficiently to the customers for an effective switch. More importantly, publicizing the upcoming change at point of sale through store signage and conversations with customers would be leading to positive results. This personal touch will go a long way to boost customer acceptance.

New Age of Payments at its Zenith

For decades, cash, check and cards were the only payment options available with the customers to pay through. While checks and cash continue to decline slowly, cards and other digital payment methods have begun to appear and are adopted more rapidly. Also, there are mobile wallets and BHIM-UPI, new age payment apps that are being adopted at good pace. Growing smartphone use and crashing data costs over the years have helped immensely and are to be given some credit for this rapid adoption.

The government also needs to take the necessary steps and make some policy considerations when planning & preparing for cashless economy, with proper provision to serve the underbanked population as well.

Going cashless provides a lot more benefits to everyone in the society than staying cash-led. Thus, embracing it as the preferred option can mean moving into the future with lighter pockets but richer balances and economies.