Last editedJun 20222 min read
Cash may never disappear completely but it’s indisputably become a niche payment choice. These days very few businesses have a choice about taking cashless payments. The only choice is how to take them. With that in mind, here is a quick guide to everything you need to know about cashless payments.
Taking cards isn’t mandatory
Taking non-cash payments used to translate as taking card payments. Now, think carefully about whether the costs and complexity of taking card payments can still be justified.
Cards in the real world
If you’re taking payments in the real world, card payments probably do make sense. The main reason for this is that you need a physical terminal to accept non-cash payments. If you’re going to spend money buying a physical terminal, make sure that it accepts as many non-cash payment methods as possible, including cards.
Cards are still the preferred choice for many real-world payments. They are, however, under stiff competition from mobile payments (although many of these are backed by cards). This means having a terminal that can handle both of these, along with contactless payments.
Cards in the online world
In the online world, taking cards has become optional. EWallets have been eating up their market share for a long time. Now merchants also have the option to collect payments from their customers using Instant Bank Payments from GoCardless or Direct Debits.
The big advantage of eWallets, Instant Bank Payments and Direct Debits is that they tend to be more economical than card payments. Typically, they have both lower upfront costs and lower transaction costs. This is especially true of Instant Bank Payments and Direct Debits. They also tend to be simpler to implement than card acceptance.
Traditionally, the big drawback of not using card acceptance was that there were many customers without an alternative method of payment. This is no longer the case. EWallet usage has grown significantly over the years. Instant Bank Payments and Direct Debits just require the customer to have a bank account.
Cashless payments are safer and more secure
In the real world, security is probably the single biggest driver of cashless payments. In the online world, security is probably the main reason why customers and merchants are generally very cautious about cryptocurrency (digital cash), both tending to have a strong preference for payment systems with inbuilt security.
Using cashless payments largely shifts the security burden from the merchant to the payment service provider or payment platform. Some payment methods do still require merchants to undertake some basic security checks. Some take on the security burden completely. This can be a huge relief to merchants, especially SMEs.
Using cashless payments also improves safety. With cashless payments, there is usually no need for items to be passed physically between the customer and staff. This means there is less opportunity for cross-contamination. The benefits of this go beyond protecting against COVID-19.
Cashless payments make for easier administration
Counting and recording cash payments used to be a major headache for businesses. Using cashless payments automatically does away with the need to count physical money. It can also help to ease the burden of admin, sometimes significantly.
For example, if you collect payments by Direct Debit, through GoCardless, you can integrate GoCardless with your accounting software. This means that whenever you create an invoice, your customer will be charged automatically on the invoice due date. Their payment will then be automatically reconciled, which saves you a lot of time and money.
We can help
GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.