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Before COVID-19, many small businesses were already moving towards cashless setups. Undoubtedly, the pandemic has accelerated the trend. This article provides a snapshot of the advice from interviews with business owners. At a glance:

  • different cashless platforms will cost different amounts. Do your research to determine what suits your business best;
  • think of what else, outside of payments, can be contactless;
  • use it as an opportunity to look at other technology solutions that could improve your business; and
  • consider the trade-off between sophistication and flexibility. Accordingly, figure out how complex your business needs are and choose on this basis.

Customers Are Ready to Go Cashless

For a long time, convenience was the core reason consumers preferred to tap their card on an EFTPOS machine instead of rummaging through their pockets for loose change. But then, COVID-19 happened, and cashless payments were not just a handy option but a matter of public safety.

Between January and June of 2021, one-third of all businesses adopted an effectively cashless model. This allowed them to be more agile and reduce the risks associated with holding onto too much cash. Likewise, at a time where public health is paramount, going cashless is also a way to keep customers safe. Ultimately, this system minimises the amount of money changing hands.

However, before you dive into adopting a cashless transaction system yourself, there are a few critical points that some experts think you should consider. Considerations include:

  • making your cashless system part of a wider digital ecosystem; and
  • choosing a platform that integrates with other software.

Make It Part of a Wider Digital Ecosystem

Simon Le Grand is the APAC Director of Product Management and Marketing at Lightspeed (a commerce and ecommerce company). He has noticed the rise of cashless systems in recent months.

“Around this time last year, we still had about 40% of transactions coming through our hospitality base as cash. And that was slowly declining month-on-month, but not dramatically. All of a sudden, along came COVID-19. Now that [cash] number is around the 23% mark.”

Some businesses are using the opportunity presented by the changing marketplace to integrate contactless technology into their operations.

“You want to have a [cashless] product that’s a one-stop shop across accounting, ecommerce, loyalty promotions.”

Chris Connelly, Global Director of Payments at Vend.

Many hospitality businesses, for example, are thinking creatively about how else they can innovate through the use of touchless payment software, Le Grand explains.

“Things like order-ahead and delivery apps, and now even order-and-pay-at-table apps.”

Choose a Platform That Integrates With Other Software

Chris Connelly is the Global Director of Payments at Vend (a retail management software company). He recommends looking at whether the cashless payment provider you choose is compatible with other payment methods, such as buy-now pay-later providers.

Also, he says, explore other services that your business could integrate with a cashless payment system, such as promotional tools, for instance, or accounting programs.

“You want to have a [cashless] product that’s a one-stop shop across accounting, ecommerce, loyalty promotions, all of these things,” Connelly says. “Unfortunately, there’s no one entity that can do all of the above today. So you want to ensure the platform you choose – your central platform, quite often it’s the point of sale – is interoperable with other apps and add-ons.”

Interoperability vs Optionality

Likewise, Connelly says that deciding on the right platform for your business can often involve a trade-off between interoperability and optionality.

“It comes down to your business’s sophistication.”

Chris Connelly, Global Director of Payments at Vend.

“If you’re a basic user, you’ve got basic workflows and operations, then it becomes a lot easier to build a proposition that covers all those bases.”

“If you’ve got more advanced requirements – if you’re an enterprise retailer, for example – and you have custom workflows or operations, or you have to work with a particular ecommerce platform, then [choosing a platform] becomes more of a case-by-case thing.”

He suggests taking the time to ask potential providers about the services or platforms they have connectivity to or, perhaps more importantly, which ones they do not connect with. This can help you narrow down your options and choose a provider that aligns with your business’ needs.

Connelly says cashless payments offer a way of changing your entire business operation approach.

“We’ve seen a massive influx of customers stop their procrastination around digitising their business and look for that new-gen solution to… be able to sell across more channels than just in-store,” Connelly says.

“For example, we’re seeing a 500% increase in retail sales taken up online versus pre-COVID [and] six times more sales throughout the time of COVID-19.”

Final Considerations

Research from software comparison website, Capterra, showed some consumers prefer paying with cash for small amounts, especially older Australians and low earners. Consequently, consider easing into a cashless business by ensuring the system you choose still allows for cash transactions.

Additionally, consider the costs associated with hardware. These costs will vary. At the time of publishing, pocket-sized, on-the-go POS systems potentially cost as little as $60 (usually a one-off payment). However, they might lack the sophistication and data insights that more expensive models offer. For bigger, fixed terminals, you can be looking at higher costs such as anywhere between $300-$400 per year. This price reflects how some providers charge monthly fees instead of offering lump sum payments.

Finally, be aware of any potential joining or cancellation fees, as well as fees charged for exceeding a specific turnover in revenue.

Key Takeaways

Health and safety concerns that have arisen during the pandemic and the convenience of going cashless have increased the number of customers ready to go cashless. If your small business is considering transferring to a cashless system, consider making it part of a wider digital ecosystem. Additionally, choose a platform that integrates with other software.

Our partner, Prospa, are passionate about helping small business owners access the money they need to grow or manage their cash flow. Find out how Prospa could help your business access the much-needed funds.

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