The benefits of making your business cashless are plentiful. And there is no time like the present. The era of physical money is potentially coming to an end as card transactions look set to overtake cash in the UK for the first time this year.
Virtual bank payments can be moved between accounts in seconds and secured in various ways, such as via PINs, passwords, biometrics and encryption. In addition, such types of payments provide businesses with a clearer view of their finances as they offer real-time visibility of how much money is at their disposal.
For consumer-facing businesses such as those in retail and hospitality, going cashless means less time is spent processing payments, maintaining a cash float or cashing out at the end of the day. As a result, staff can focus their time and energy adding more value to the business and avoiding these monotonous tasks.
The greater transparency of digital transactions is another bonus, with the ability to create a virtual record of where money has moved from and to, and payments linked directly to customers and suppliers.
Such payments also have the benefit of cutting across international borders, something that cash – unless you’re operating solely in the Eurozone – cannot compete with.
All this is well and good, but for a small business currently making use of cash, what’s the best way to make the transition to being cashless? Here are four tips that could help:
1. Identify where cash is being used
Identify which areas of the business are using cash. If you know where cash is being used, it will be easier to focus your efforts.
The most common areas in which cash remains a major method of payments are the consumer-facing elements of retail and hospitality. People often buy cheaper goods and pay for drinks in pubs with cash, particularly if they will be charged a fee if the payment is less than a certain value.
There will be some areas in which cash is hardly used at all, making it easier to phase out any remaining cash transactions by encouraging the customers, suppliers or employees to use alternative methods of payment.
2. Integrate cost-effective contactless payments
It is becoming easier and cheaper to introduce contactless payments, thanks to the availability of low-cost card readers, which require relatively little infrastructure investment.
The iZettle reader, for example, rapidly completes contactless payments by connecting to a dedicated smartphone or tablet app via Bluetooth. Meanwhile, the PayPal Here reader supports direct payments into PayPal accounts with no monthly fees or fixed contract.
3. Have confidence it will pay off
Some customers will still want to persist with cash for now, but having the means for them to pay without the need for physical money will stand your business in good stead when they eventually switch to contactless cards. And, with most banks now issuing contactless payment cards, this will only be a matter of time.
4. Bring in new payment methods
Where cash is used for business expenses, such as office supplies or travel, it makes sense to switch to a prepaid payment card, which many virtual banks offer. These cards can be topped up quickly when needed and employees can make payments anywhere in the world, with no fees charged.
The size of business will impact how long the process of going cashless might take. A startup with a handful of employees and just a few years of financial activity and paperwork will be able to make the shift more quickly than an established SME with 100 employees.
But the principles are the same: Identify where cash is being used and work out the most cost-effective and efficient ways to make these transactions cashless.