With the coronavirus pandemic causing a major reduction in cash usage, more and more experts are starting to speculate about moving to a fully cashless society. Research shows that the customers’ newfound digital habits will stick around even once the pandemic ends. But what would a cashless society look like? And how would it affect merchants?
The answer to the first question is surprisingly complex. Though the concept seems simple, the definitions of a cashless society can vary. Some would define it as 100% cashless, which would take paper money and coins out of circulation. Others see a cashless society as prevalently digital but still allow for the use of cash on some occasions.
Either way, the digital method of processing, handling, and storing money would reign supreme. Here are five ways going cashless would affect merchants and businesses.
1. Increased Efficiency
Managing cash involves a lot of busywork, from compiling reports to printing receipts. A digital system would minimize the paperwork, speed up checkout times, and increase overall efficiency. Businesses would be able to see their financial data in real-time, allowing them to react to challenges and opportunities quicker than ever before.
2. New Technology
Due to the pandemic, many merchants have already switched to digital payment methods such as mobile payments, contactless payments, credit cards, virtual terminals, and so on. In a cashless society, everyone would have to adopt digital technology. Though the switch may initially seem overwhelming, it would allow businesses to stay flexible.
3. Improved Security
With more businesses migrating to cashless payment options, it’s up to the merchants to provide an adequate level of security. In a cashless society, merchants would have to place a priority on protecting sensitive data by investing in security solutions and protocols.
4. Customer Concerns
By choosing to abandon cash, a business may encounter negative publicity. If some of your customers don’t have access to digital or simply feel strongly about using cash, you’ll likely lose them. Two popular restaurant chains, Sweetgreen and Shake Shack, experimented with going fully digital but quickly back-pedaled once the decision proved controversial.
Even so, it’s worth noting that every business is different. Going fully cashless in today’s society may not be the best idea for a restaurant chain, but many businesses have a core customer base that doesn’t mind — or even prefers — going digital.
5. Easy Payment Methods
The shift to a cashless society is something most consumers would welcome with open arms. The main things they’re interested in are easier and safer payment methods, and digital payments deliver on both of those requirements.