by Bill Nolan
Take a quick look into your wallet right now. How much cash is in there? If you’re anything like the growing majority of people, you probably don’t have much – if any. Unless you’re going somewhere that cash is essential, like the local adult club, right? Okay we’ll save that one for another time. The point is, with so many payment options these days, we appear to be well on our way to a cashless society. Good thing. This will help prevent that overstuffed wallet from causing you back problems like George Constanza. In all seriousness, what does that mean for your business? Is paper currency on its way to extinction?
The Cashless Society
The Rise of the Mobile Wallet
Apple Pay, Android Pay, Samsung Pay, PayPal, Square Readers, Online Only Banks, the list of Mobile Wallet options goes on and on… keeping in mind that doesn’t include the use of traditional credit or debit cards and the good old-fashioned check. The great news is, with so many payment options available for your business, taking customers’ money should not be a problem. However, issues do arise. If you’re selling your products to a buyer online and they notice that you don’t offer their preferred payment method then there is a slim possibility you may lose that sale to someone who does. People are getting finicky about these things. This has the potential to become a huge problem when selling online. It could make your shopping cart abandonment rate soar. What do you do to prevent this? It’s really not feasible to offer 30 types of payment options. Your best bet is to do some research and find out how your target audience prefers to pay for services. In the end you probably won’t satisfy everyone. Make your choices wisely in order to yield the most benefit for your business.
Digital Currency
While those Mobile Wallet forms of payments are fine and dandy, many people believe that other forms of Digital Currency will be the payment methods of the future. Bitcoin, Ethereum and Ripple come to mind. Although many are still skeptical of this technology, it’s seems to be here to stay. A couple governments have started to test the process of accepting Digital Currency for payments and many online businesses have already as well. Gift cards can be purchased with it, and private sellers are also beginning to accept this Digital Currency. Without a doubt, it’s gained a lot of momentum in the past couple of years. That being said, your business doesn’t need to start honoring it tomorrow, but it’s definitely in your best interest to be near the cutting edge of the cashless payment evolution. You might want to start looking into it.
Reaping the Benefits
As far as Mobile Wallets, the benefits are two-fold really – for the customer, it’s speedy and convenient. They simply hold their mobile device near the terminal and they’re out the door and on their way to enjoy the purchase. They are also thinking about how pleasantly easy the transaction was. For the business owners, the quick transaction helps alleviate long, restless lines at the checkout. Actually that’s just the beginning for both consumers and sellers. Mobile wallets let businesses deposit loyalty programs, coupons, etc. directly into the consumers hands. In addition, the wallets also enable the customer to store email addresses and contact information so they don’t have to be asked over and over again – also helping to streamline the checkout process.
And Digital Currency’s benefits you ask? Users of Bitcoin, for example, basically maintain complete anonymity. This is one of its most well-liked aspects. You can see the times where this might be really helpful. There is no third party involvement. The government, banks or other financial institutions can’t stop transactions or freeze accounts because technically those institutions don’t exist in the cryptocurrency world. Sweet! This also means that purchases aren’t taxed, and fees for transactions such as wire transfers are very low. With that said, you can see how Digital Currency still has somewhat of a shady reputation, but like I mentioned before, it’s becoming more accepted online and at brick and mortar locations every day.
Security Concerns
Obviously, one of the most important aspects involved is security. The bottom line is that the top Mobile Wallet apps offer superb security and encryption technology that far surpasses swiping an actual card through a standard card reader. Just think back through recent years and the numerous times crafty hackers were able to breach credit card readers in some way or another. Interestingly, EMV regulations implemented in 2015 did place fraud liability with merchants who had outdated equipment. The result, besides added security, was the demand for retailers to upgrade their systems; which in turn, the new systems operate as contactless POS systems accepting Mobile Wallet transactions. This means more and more retailers are getting on board with new technology continuing towards the cashless trend.
As for the security of Digital Currency, such as Bitcoin, it has had issues since it first came on the scene around 2009. But this really is a serious business and continues to update more frequently than banks. Along with many tweaks and bug fixes over the years, a universal platform to handle transactions has made Digital Currency a solid form of payment. Plus, the addition of new and really big players consistently joining the cryptocurrency frenzy will likely continue to fuel improvements and new applications for this technology. Although Digital Currencies are still somewhat behind Mobile Wallets, each day more and more businesses are beginning to accept this as a form of payment.
There’s no question, the need to carry cash is becoming somewhat non-essential. The explosion of the financial technology (Fintech) sector has seen to that. Heck, I was at a farmers’ market recently and they all had digital payment options on hand. What does this mean for paper currency? I don’t foresee physical currency becoming obsolete anytime soon, at least not in the next 5 years. There are still plenty of transactions taking place where cold hard cash is the only form of payment accepted there. Plus, like me, many people still like pulling out that gangster roll of cash from their pockets to make purchases – so we’ll keep it around a bit longer. Just keep in mind, change is coming soon and it’s happening faster than most can grasp. Get ahead of the competition now.