Three reasons why society is becoming cashless – and three ways your business can prepare for it
At the heart of all good businesses is the ability to adapt.
It doesn’t matter whether you’re trading from your home office, a market stall, or through a website – if you don’t embrace change, and don’t listen to what’s going on in the wider world, your business isn’t going to grow.
And there’s an issue that’s been creeping up on business owners across the US for years now. It’s not quite the end of the world – but it’s almost certainly going to be the end of the line for cash.
How do we know? Well, at Expert Market, we researched a range of data looking at how people all over the world prefer to pay. The goal? To give your business all the knowhow it needs to navigate a new future; a wild world of shifting technologies, and an increasingly digitised payment space. A world without cash.
Let’s take a closer look at what we found.
A cashless future
The writing’s on the wall for cash, with the Federal Reserve Board’s 2018 Payment Study showing signs of declining ATM usage and increasing card payments across the US. Trends from across the Atlantic are even more staggering, with hundreds of bank branches – and thousands of ATMS – disappearing from the UK high street every year.
Why is it happening?
The decline of cash is down to a combination of factors. For one, improving technology has made it easier than ever to pay with card. Growing payment industry infrastructure has made card spending accessible, with governments encouraging cashless spending in droves. But most importantly, what’s boosted the rise of card and mobile payments is a whole new generation of users with the mentality – as well as the motivation – to embrace it.
Wireless wallet wizardry
Let’s talk about the technology that’s taking tapping to the top. NFC stands for near-field communication – it’s a form of wireless data transfer that allows consumers to make contactless transactions from their phones. And though the acronym may not be a household name just yet, the technology is everywhere. If you’ve got a smartphone, the chances are it’s equipped with NFC capability.
The ubiquity of this clean, quick, and simple payment method has seen a surge in the popularity of ‘mobile wallets.’ The growing league of businesses accepting contactless, combined with the simplicity and convenience of mobile wallets, means fewer people bother carrying cash around. In fact, 33% of them avoid using cash altogether.
But, wait – who are ‘they’?
Millennial mentality
Millennials. Also known as Generation Y, or broadly, a tech-savvy and discerning bunch who aren’t that interested in increasingly archaic ways of paying. Expert Market research showed a whopping 68% of millennials had been frustrated by a cash-only business.
Why does this matter to you? Well, millennials make up about two billion of the world’s population. And it’s trillions of dollars that they’re spending every year. No matter what you’re selling, millennials are a big market – and not adopting their preferred way to pay could damage your business.
Colossal contactless caps
By now, we’ve got two key ingredients in the cashless society recipe – the technology, and the people to use it. The third, then, relates to how much governments around the world are moving to embrace and enable card payments.
Asian countries, in particular, are demonstrating a positive attitude towards contactless and mobile payments. China lets consumers spend almost $150 in a single contactless transaction, while in Japan, you can drop over $175 with one tap. Higher contactless limits stimulate more spending, and have no doubt contributed to the economic growth of Eastern powerhouses like Singapore and Hong Kong.
It comes as no surprise, then, that these countries are also the ones that have taken to mobile wallets with the most gusto. Mobile wallets account for more than a third of payments in China, and their popularity is growing over in the West as well. Mobile wallets make up 3% of all payments in the US, and 6% in the UK.
What does it mean for you?
Technology, a millennial mindset, and the growth of the card payment industry’s infrastructure have all combined to see contactless and mobile payments emerge as our favourite way to pay.
As a business owner, you probably already know your audience. But do you understand how they like to pay? And is your business prepared for the challenges – and the opportunities – presented by a completely cashless society?
You’ve read the data and know the trends, but what do you do about them? How can you equip your business with the right tools to grow with a cashless society, and to adapt to a new landscape?
We’ve got three tips to get you started.
1) Go mobile
If your business relies on taking payments directly from your customers, you might not have even thought about getting a card machine. Don’t worry – we’re not talking about those big clunky things you sometimes see sat on the countertops of convenience stores.
Nope – there’s actually a range of sleek, stylish, and portable card machines for small businesses. Some of them plug straight into your smartphone, which makes them perfect for taking payments on the go. And they’re easy to get set up, with some companies offering the card reader for free – you just pay a small percentage of each transaction.
Whether you’re running a delivery business, giving private lessons, or busking out on the street, a card machine is a simple, quick alternative to cash, and a great way to prepare for the future.
2) Embrace ecommerce
Are you thinking about starting up an online side hustle? Do you already have a good-looking website to showcase your products, but still rely on cash to get paid? Adding a payment gateway to your website means you can safely process card payments online, smoothing out the ordering process.
If you’re serious about growing your business – as well as adapting to payment industry trends – you’ll need a payment gateway to sell online. Fees can vary, so make sure you do your research for the best deal. For more advice, check out these five tips to stay ahead of the ecommerce curve.
3) Dial and deal
Even if you’re already set up to take online and face-to-face payments, you could still be missing out on the ease and convenience of taking payments over the phone.
Yep – there are plenty of merchant service providers that offer what’s called a ‘virtual terminal.’ It’s perfect for mail order businesses, especially smaller ones. You just call your customer up, grab their card details, and enter them into a secure web-based portal.
Getting set up with face-to-face, phone, and ecommerce payments is a great way to start getting ready for a cashless future – a destination that’s not a question of ‘if’, but ‘when’. How far along are you in your journey towards completely cashless transactions? What did you think of our card payments industry data and predictions? Leave a reply below with your thoughts.
