The attention of retailers has rightly remained focused on continuing to safely serve their customers despite the restrictions mandated by the COVID-19 pandemic. As a result, one new trend that’s rapidly rising in popularity is shoppers using cashless methods of payment.
It is estimated that 63% of adults are using cash less frequently in the wake of the coronavirus. Fifty-four percent are relying more frequently on credit cards and debit cards for their purchases, and 34% have increased their use of digital payment methods. Given this, more retailers have now made operational changes to support no-touch payment options such as mobile payments and contactless cards:
- 67% of retailers in the U.S. now accept some form of touchless payment.
- 58% support contactless cards, compared to 40% in 2019.
- 56% take payments from digital wallets on mobile phones, compared to 44% in 2019.
- 94% of retailers who accept contactless payments expect their use to increase over the next 18 months.
Before rushing to implement a cashless payment solution, retailers need to be aware of the pitfalls they may encounter and how to avoid them. One key factor that’s especially important for retailers to keep in mind is to not alienate customers who rely on cash for their purchases. However, with the right amount of forethought, a business can seamlessly implement a payment model that accepts both cash and cashless payments.
Is Going Cashless the Best Solution for Your Business?
Before taking the cashless plunge, retailers have to take a good, hard look at their current operations and identify the impact that cashless payments will have on customers, employees, and management.
The store’s POS system, accounting software, and security procedures must be adapted to the cashless payment model:
- First, confirm that your state or city hasn’t enacted a ban on cashless businesses. These are put into place in large part because those who live under the poverty line often have no alternative but to use cash for their purchases. The Hunton Retail Law Resource lists the jurisdictions that require businesses to accept cash for payment. The cities and states that have instituted a cash requirement for retailers or are considering doing so include Massachusetts, Rhode Island, New Jersey, New York City, San Francisco, and Philadelphia.
- Next, determine how reliant the business is on cash purchases. For example, many upscale shops and restaurants have few cash transactions, while food trucks and small retailers depend on cash payments for the majority of their sales.
- Finally, make sure your POS system supports a variety of cashless payment options, including EMV, swipe cards, and touch-to-pay digital wallets. The cashless system must also accommodate the needs of staff for timekeeping, commissions, and tips, just to name a few.
One Way to Keep Cash as an Available Option
Small business owners who aren’t in a position to go totally cashless can continue to accept cash while giving customers alternative payment options by integrating legacy cash registers with modern cloud-based POS systems. The stores can continue to use the equipment they have in place combined with inventory management, sales analytics, and other advanced POS features.
The downside to the integrated cash register approach is that cash transactions have to be recorded manually, which increases the risk of accounting errors and reduces the reliability of the data that’s used for sales analytics. Not to mention that cash transactions cause businesses to miss the chance to link sales transactions to the customer’s purchase history.
An alternative approach is to maintain a cash drawer that is able to accept nearly any kind of payment method and offer PCI-compliant security. The ability to connect sales data to specific customers helps the business build brand loyalty while also creating more transparency in inventory control, employee management, and other business operations.
Retailers Are Preparing for the Mobile-Payment Boom
The U.S. currently ranks sixth in the world in mobile payments, in large part because it’s more convenient for many people to pull out their phones than grab their wallets. As mobile wallet options become more accessible for consumers and app-based checkouts become more convenient, retailers will be expected to offer their customers modern cashless payment options.
Offering a wide variety of payment options sets the groundwork of modern modular POS systems to easily expand and adapt to changing customer preferences and market conditions as needed. For example, functions such as automated purchase orders can be added to the POS system’s basic inventory management features. Modern POS systems have the ability to convert simple transactions into engaging activities that capture customer information, create loyalty programs, and automatically apply discounts or special offers.
Of all the reasons to implement cashless business practices, one stands out: They’re what today’s customers want. Especially with COVID-19 putting a heightened focus on the safety of interactions between retail employees and customers, integrating cashless solutions into your business operations is now more essential than ever.
In a period of change, talech has a number of POS solutions that can help retailers adjust operations smoothly. From reaching new audiences to engaging with your existing customers more often, we give you the tools to adapt quickly and with confidence.
Want to learn more about cashless solutions?