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Making the Move to Running a Cashless Business

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How To Make The Move To A Cashless Business

What springs to mind when you first hear the phrase “cashless business”? Poor cash flow? No customers? Empty tills?

The mind quickly hastens to conjure images of innate negativity and emotional distress.

But in the realm of modern commerce, this is very seldom the case. Cashless, despite what people may think,  no longer means a business with no money. It has ameliorated to mean one that does not accept paper or coin currency and doesn’t have a traditional till. 

Although this contemporary and new business model is still in it’s infancy, it is showing signs of growth. With a noticeable portion of smaller, boutique businesses opting to only take payment through card.

With the societal shift to mobile and contactless payments continuing to grow, and developments in mobile payment technology being delivered at break neck speed, there’s a large amount to be said for running a cashless business

 

Understanding Cashless Payments

Before you can run a cashless business, understanding why it’s possible to do so is crucial. 

Barclaycard first introduced a contactless bank card in 2007, and although early adoption was slowed down due to security concerns, by 2014 there were approximately 58 million contactless cards in the UK. According to the UK Card Association there are now a total of 108.4 million contactless cards within the UK. 

Prior to adoption of contactless technology, card payments were primarily used for online shopping or larger purchases. However, as contactless became widely adopted it quickly grew to be used for purchases where cash would have easily 

An article published by the BBC recently revealed that for the first time, contactless payments accounted for half of all card transactions in the UK; a huge milestone in the world of payments and symbolic of the fact that a cashless society is very much a possibility. 

 

The Components of a Cashless System

In your traditional ePOS (or till) system, you would typically have a cash drawer. This would sit below the till component and would hold cash takings for the day. It is of course, a key component when you accept cash as a form of payment. 
However, in a cashless business there is an absence of cash and therefore an absence in requirement for a “cash drawer”. 

When it comes to ePOS, there are two varieties for accepting card payments. Integrated and Unintegrated. Unintegrated simply means that your card terminal and your till are not communicating between each other. The operator will have to manually enter in amounts to be paid. Although this can be a good starting point for small businesses starting to accept card payments, it does create potential for human error, and can sometimes be a slower process. Ultimately, this is not the optimal choice for running a cashless business. 

Integrated systems are the exact opposite. Your till and your card terminal(s) communicate with each other to provide a slick payment experience with a significantly reduced margin for human error. If you’re considering making a move to a cashless business, an integrated payments system is the way to go.

 

Benefits of a Cashless System

The benefits of a cashless business have limitless potential, however there are two major benefits that are drawing newer and more progressive retailers into opting for the system.

Queue Busting
In peak shopping periods, such as Black Friday and Cyber Monday, your primary objective as a retailer should be quick and friendly transactions. For the benefit of the customer as much as yourself. 

Queues will be forming a lot faster than usual, and there will be a sporadic mix of cash and card payments. 

Notes need to be checked for legitimacy, counted, placed in the cash drawer correctly and then change needs to be returned to the customer. Every step of this process takes time, and human error can disrupt it massively. 

If a customer is accidentally short-changed, this of course needs to be rectified. But this will hold up the queue even more than it already has been and will likely annoy customers waiting in line. This could in turn lead to them simply walking out. 

However if you’re only accepting card payments, then this process is made quick and streamlined. There’s no need to count cash, hand back change or check for legitimacy of bank notes. Customers can simply pay with contactless, or Chip & Pin and be on their merry way. 

Environmental Benefits:

Environmental and climate change awareness is a hot topic in the news, and there’s been a constant bombardment of mounting pressure for businesses (big and small) to reduce their carbon footprint. 

In 2016, the Bank of England started printing £5 notes on polymer rather than the traditional paper-based material. This was subsequently followed by the £10 note. 

Although on the surface this might seem entirely environmentally conscious, the new note sparked controversy when it came to light that one of the ingredients was animal fat. Religious groups, alongside animal welfare activists called upon the Bank of England to change the process, but it remains the same. 

Although non-paper-based notes are a step in the right direction to reduce paper usage, cashless stores provide a better foundation for businesses trying to do their bit to help the environment.

 

Four Steps Towards a Cashless Business 


With all that being said, what actions can you take and processes can you implement that facilitate the move toward a cashless business:


1 – Think about your customers, location and card takings

Ask yourself: Is becoming a cashless business a viable option for you? Well, that’s entirely dependent on the business you run and the types of customers that you have.
If you run a small corner shop in a rural location with an ageing demographic, going cashless is likely to be more of a detriment than a benefit. 
Older people may be slower to adopt new payment technology, and many rely on having cash on hand to pay for things. By taking away that option, you’d be alienating a considerable portion of your customer base.
Whereas the same business located in a bustling city with a rpimary demographic of young professionals may benefit greatly. 
Alongside that, think about how much money you currently process through your card terminal. How often are you handling cash?
Or are you one of the businesses who still handles cash more regularly than card? If so, you might look at other ways of streamlining your business and making it more environmentally friendly.
 
2 – Research and investment in what’s right for your business

If you aren’t going to accept cash as a form of payment, it’s imperative that your card payment process is absolutely perfect, as you won’t have a cash option to fall back on.
Putting the time in to research payment providers properly will pay off in the long run, and it’s important that you are looking at the right aspects.
Make sure you pay extra attention to the provider’s:

  •  uptime rating
  •  online review score
  •  customer service
  •  ePOS integration.

By choosing a provider that excels in all of these areas, you can rest assured that you’ll be taking card payments with no worries whatsoever.


3 – Train your Staff
Once your shiny new payment system is installed, make sure that you and your staff know how to use it. 
Ensure that you take some time learn how your own systems work, so that you can better effectively and assist your staff to deliver quick and painless customer service on the front line of your business


4 – Give your customers notice
As soon as your staff are fully trained and assessed, you’ll need to set a date for your business to fully transition over to a cashless system. When deciding on this, make sure you consider key dates in your business calendar. Such as when you bank cash, or when you pay suppliers. 
Once the date has been set, it is vital that you begin communicating with customers quickly and clearly. Scannable and to-the-point notices on the counter, with a clear date and explanation of what’s happening will clear up a lot of queries before they’re asked.
Use social and media too, where appropriate. Some customers may ask “why the change”, so ensure your staff are trained to give a concise but polite explanation. 
It’s imperative that your customers know of the change, so they aren’t caught out by lack of awareness and you don’t miss out on sales.
 

 

Conclusion on Running a Cashless Business

In 2017, there were 13.2 billion debit card payments, a rise of 14% from 2016. Alongside that, contactless payments sky-rocketed in 2017 by 99%.

This indicates that consumers are moving toward being cashless, and retailers, one way or another, will eventually have to accommodate as we start seeing less cash go through the tills.

With card and mobile payment technology advancing at an alarmingly quick rate, one way or another, all retailers will have to accept card payments and come to terms with the fact that they will start seeing less cash come through their business.

The safest route a small business could currently pursue is to invest in an integrated ePOS system. With your card terminals being linked to your till, there’s no chance of accidentally over or undercharging your customer.

Accepting contactless and mobile payments will shred through your queue times at busy periods, and operating as a cashless business could ultimately improve the way people perceive your business in respect of being environmentally conscious.