Ramdas Shenoy from stirfryMBA gives insights on how businesses can go cashless.
I recently had a doctor’s visit and saw a notice which read ‘No Cash Please’. I was very surprised looking at the notice, specifically coming from a doctor’s office in India, who deal with patients who come from all walks of life. Wondered, how would he treat patients who do not have a bank account, but perhaps thanks to India’s digital movement , Digital money has become conversant with all strata of society.
It is said that businesses that go cashless experience will experience increased efficiency, but what about loss of customers who are only cash paying? What will be the test to determine if cashless commerce is right for your business.
COVID has got into new consumer habits of cashless transactions and a trend being observed is that many business are going fully cashless.
There are, however, also several points to look at while determining whether or not going cashless is makes sense for your business.
CASH TO CASHLESS COMMERCE
The list of businesses choosing cashless commerce continues to grow in recent years. Even Amex kind of premium credit cards have encouraged customers to use Non Cash transactions while shopping with a small entrepreneur. Airlines have stopped accepting cash for in-flight purchases.
Dealing with cash is a headache and calls for additional investment in security and insurance. You remove cash, you remove the chance of theft from customers or employees.
Getting rid of cash can save lot of time. They don’t have to deal with managing a register, balancing their drawer at the end of their shift or handling large amounts of cash
A cash-free means convenience for the team and the customers who get a better experience and turn around employees, with less time in the queue.
The question you need to ask is can businesses totally do away with cash? The answer is yes, provided all your customers have their accounts linked to their phones. But it also means a lot of instances, who don’t and also during those times for some technical snag, when the digital gateway doesn’t function and such instances could be negatively impacted by cashless commerce.
For that reason, many people wonder if stores can get away with not accepting cash.
You many argue that banning cash is discriminatory and hurts low-income residents and one cannot have a legislation banning cash transactions.
Things to consider before going cashless
If there are no laws prohibiting cashless commerce, it may be a beneficial choice for your business.
Your business will likely operate more efficiently. For busy businesses, this is no small feat. You will likely eliminate the risks that come with storing money on-site, and many customers will appreciate the change since cashless payments mean shorter wait times.
You should, however, also keep in mind all the customers you are potentially turning away with this move. And cashless commerce also comes with fees that can range up to 2.5% of the total transaction price. Here are a few things to consider before making the decision to go cashless:
- Consider what percentage of your demographic pays in cash.
- Would cashless commerce help or hurt 80% of your customers?
- Can you afford to lose a small percentage of your customers?
- Can you afford to pay the fees that come with digital transactions?
If you decide that cashless is the right way, then ensure that the transition is smooth.
And make sure to negotiate the fees with credit card companies so you can save money wherever possible as applicable.