Here, Richard Cox, managing director of Langley Business Systems, discusses whether the retail industry is ready for a cashless society as COVID-19 spearheads contactless payments
COVID-19 has altered how we live our lives in many ways, one of the most enduring changes being the UK’s shift towards becoming a cashless society. Whilst there is no denying contactless and card payments have grown in popularity in recent years (today, under a quarter of retail payments occur in cash), the pandemic has increased our reliance on these payment methods and accelerated the step towards us becoming a cashless society in a short amount of time.
A cashless coronavirus world
At the beginning of the coronavirus outbreak, the contactless payment limit was increased to £45 and shops actively encouraged consumers to use this option due to health concerns surrounding the physical handling of banknotes and coins. Although it has not been confirmed that the virus can be transmitted via physical money, many have still opted to switch to contactless in a bid to limit any potential risks.
Furthermore, the greater threat of catching COVID-19 through other touchpoints such as chip-and-pin, coupled with lockdown and non-essential retail closures, has forced people to change their behaviour. With many now relying on online shopping and contactless, we could see a more permanent and long-term preference for contactless methods over physical money as a result.
Clearly, retailers cannot expect things to return to how they used to be overnight, if ever, but are they prepared to accommodate the new normal?
Digital is the way forward
For retailers, having a digital solution is no longer just an option – it is a necessity, but the shift can be scary for business owners. Many have avoided introducing card-processing capabilities due to high fees, but currently, most people are more likely to spend digitally than with cash, so the benefits of going cashless far outweigh the transaction charges.
Adapting to changing consumer behaviour and moving away from cash can help businesses stay afloat in challenging retail conditions, and there are numerous advantages of running a cashless store.
Firstly, going cashless enables retailers to be more efficient, by speeding up the paying process. In fact, according to Visa, cash payments take between six and seven seconds to process, compared to just one or two seconds for contactless payments. Businesses who often find themselves with lengthy queues, particularly during peak times, will also notice that going cashless helps cut down on queuing time significantly and could increase the chances of customers who are in a hurry deciding to make a purchase.
Contactless and mobile payments also make spending money more convenient than ever for consumers, and opting to go cashless eliminates the need for shoppers to find a cashpoint to withdraw money, or worry about carrying enough money to buy something, which can be enough to put them off making a purchase altogether.
Moreover, consumers have been shown to spend more when carrying their card than if they were carrying cash, as having a finite amount of cash in your wallet puts an upper limit on your purchasing compared to the flexibility a card offers.
Going cashless also limits the amount of time that goes into handling cash for a business, with no need for regular trips to the bank to make deposits, or to count up at the end of every day.
The benefits don’t stop there, but if retailers are to take advantage, stay ahead of the competition and satisfy customers, they must be able to innovate and embrace the change that comes with going cashless.
Getting ready for change
To successfully take the leap to going cashless, customers need to be shown how to live in a world without cash, and businesses must have access to solutions that will encourage them to use cashless transactions. One size doesn’t fit all, and the key for retailers is to find the right Electronic Point Of Sale [EPOS] system that will make the buying process to the customers simpler, faster and more efficient.
It is vital for retailers to find a reliable and secure technology platform that will enable them to accept all major payment types and will help them offer customers flexible ways to pay, faster payments and more confidence as they adjust to the new cashless reality.
Furthermore, retailers that go beyond just accepting cards and make the most of the tools and insights provided by a fully integrated payment system will come out on top, as they identify and respond to the wants and needs of customers and reduce admin time by streamlining payment processing and business management.
Cash is falling out of favour for many reasons and, with speed, security and convenience all being so important for shoppers, it’s not surprising that contactless is quickly becoming the most popular way to pay.
Now is the time for retailers to pivot their service models, invest in contactless payment services and tap into the opportunity of a cashless world or they risk being left behind.