Last editedApr 20222 min read
According to the Reserve Bank’s 2019Consumer Payments Survey, just 27% of consumer payments were made with cash. This is down from 69% in 2007, showing just how rapidly the payments landscape has changed as more transactions move online. Is your business accepting alternative forms of payment yet? There are cashless payment advantages and disadvantages to consider as you transition away from paper cash.
What are cashless payment methods?
While most businesses in Australia are still accepting cash for in-person purchases, both online and in-person transactions are more frequently cashless. Here are some of the most common cashless payment methods:
Eftpos payments: This domestic payment network facilitates electronic funds transfers directly into the merchant account when the customer uses their bankcard, credit card, or debit card.
Credit and debit card payments: Debit cards let a customer pay from their own bank account, while credit card payments are charged to their credit account with a suitable provider.
Direct debit payments: Direct debits enable bank-to-bank transfer of funds.
Online or mobile payments: Cashless payment apps like PayPal allow customers to pay for goods and services using their accounts.
Mobile wallets: Services like Apple Pay and Google Pay enable secure payments using stored card and banking details. Like PayPal, these are cashless payment apps available with a tap or swipe of your phone.
Cryptocurrencies: Cryptocurrencies like Bitcoin can be used to pay securely for online goods and services.
What are the benefits of cashless payment?
While there are both cashless payment advantages and disadvantages, today’s secure technology ensures that the pros heavily outweigh the cons.
One of the most obvious benefits of moving away from cash is sheer convenience, both for consumer and business. Carrying around paper cash and coins is bulky and requires a consumer to find cash machines or bank branches. The merchant then needs to keep change on the premises and store large cash deposits – all of which is eliminated with cashless payments.
Holding cash on the premises increases your business’s risk of robbery from outsiders as well as internal staff theft. Cashless payments are designed to be secure, using tools like encryption and biometric protection to access them. Credit card payments, direct debit payments, and cryptocurrency all involve a high level of fraud protection which is continually strengthened.
We’ve already mentioned the need for consumers to wait in a bank or ATM queue to get their cash, but what about the merchant? You’ll need to make a physical deposit at your own bank branch to get that money into your account. By contrast, card payments and electronic transfers ensure that the funds go straight into your account without delay.
There’s a wide range of cashless payment apps and services to choose from, giving versatility both to buyers and sellers. Cashless payments facilitate international transactions as they can involve automatic currency conversions.
Cash accounting makes closing time extra arduous. You’ve already been in the shop for a full workday, but then you must count out your cash and make sure it matches your receipts. By contrast, cashless payments are automatically logged and reconciled for much easier – and more accurate – end-of-day accounting.
Cashless payment: the bottom line
Australia might be a few years away from a true cashless society, but in the meantime, businesses can ride the trend of cashless payments by accepting a variety of cashless payment methods. From crypto to card payments, there are plenty to choose from.
GoCardless can help your business reap the benefits of cashless payment, enabling you to collect payments directly from customer bank accounts with their full authorisation. It offers all the advantages mentioned above, from speed to security, while being cost effective at the same time. Ourdirect debit services can be used to pull recurring and one-off payments automatically, putting your business in charge of payments without cash. It also integrates seamlessly withmajor partners like Xero for fuss-free accounting.
We can help
GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.