Electronic Payments: Why Cash Is Becoming Obsolete
As a prudent businessperson, you have probably Googled ‘will cash become obsolete?’ on your gadget. The answer to this question is relative, but there are facts and real-life stories behind it. While some regions of the world are yet to adopt electronic payment methods, the use of cash is becoming increasingly unpopular. The inevitable truth is that one day, digital options for transactions will strip money of its visibility and usefulness, especially in a post-COVID world. So, why is cash becoming obsolete, and should you completely transform your business to only accept cashless payments?
Electronic money is more convenient
When is the last time you received a check or wrote one for someone? There is a reason why in countries like the USA, Sweden, and Germany, over 95% of adults have made digital transactions their first choice. Imagine having to walk to your neighboring shop in the morning to ask for change to give to a customer — this is just one problem that convenient cashless payments eradicate. The ease of transactions is on another level, and it happens in seconds. It is useful for emergencies, such as in the case of abrupt medical situations.
Electronic money is safer
It is highly unlikely that a robber will enter your business premises, draw his gun and force you to transfer all your earnings to his account. Similarly, if you are using your phone to make payments, your money can’t be lost unless your phone is lost, and the security on smartphones nowadays makes it extremely difficult for a stranger to break into. Digital payments are not only seamless but much safer than physical checks. People have always been concerned about the safety of their hard-earned money, and if there is a better alternative to make payments, preferably through a website or app, they will gladly take it. Of course, there is always the risk of hacking and malicious attacks with online platforms, but electronic money companies are continuously bolstering their security measures. With market leaders like Elon Musk, one of the founders of PayPal, spearheading transformations of this kind, it will become normal to expect the best of security strategies going forward.
Digital transactions increase sales
It goes without saying that there are several limitations of physical money. Let’s say you are a small business person who only accepts cash. This essentially means you will have limited your customer base to pretty much only people within your locality. On the other hand, your competitor may have adopted electronic money strategies and even has an online shop where he markets his products via social media. This means he will reach out to the world, get potential customers beyond his country’s borders, and leverage shipping companies to deliver the products. At the end of the day, he will make more money and grow much quicker than those who have not jumped on the digital bandwagon.
Digital money means more choice
About a decade ago, there were only a few ways to make electronic payments. Recent years have seen the industry grow exponentially, facilitated by smartphones and the evolution of technology at large. Nowadays, there are many forms of virtual money, including cryptocurrency. As a result of this diversification, every sector of business is adopting the online mode of operation. For instance, in the old days, if a person wanted to send a present to their favorite merchant, they would have to do it manually, but these days they can send you things like small business gift cards and vouchers right from the comfort of their homes.
Modern methods have anonymity
Cryptocurrency is gearing up, with Bitcoin already being around for over a decade. Its counterpart, Ethereum, is giving it a run for its money, and such competition is healthy towards the realization of a cashless society in the future. If you accept crypto payments, you may have already realized an increase in sales and the potential to sell to international customers. The physical absence, anonymity, and the fact that people can transact anytime and from any corner of the world motivates users to opt for e-payments.
Digital transactions promote certainty and streamlines business
If you receive a payment via something like Paypal and withdraw, you are sure that your money will reflect in the business account at one point or another. This comes with a level of assurance, especially for small entrepreneurs who cannot afford to take big risks. You cannot compare this with cash and checks; a lot can happen when depositing daily earnings to your bank account.
E-payments make business operations seamless. If you sent your supplier a check or money, it could take at least a few days to reach them. Wiring payment electronically, on the other hand, is instant, which streamlines business processes.
Cashless payments are more hygienic
Electronic payments are computerized, thus contactless. This is very convenient as far as safety goes, especially during a time of the COVID-19 pandemic where a simple touch could prove fatal. Besides, e-payments minimize the carbon footprint by eradicating the need for receipts, papers, ink, and printers.
Things to be careful about
Naturally, electronic payments have a few disadvantages. These include:
- The risk of fraud
- Disputed payments
- The risk of identity theft as users may need to provide personal information
- Cryptocurrency could collapse at any time hence being a high risk
As technology continues to evolve, market leaders are finding ways to navigate around these challenges to make the system safe for both entrepreneurs and consumers. It is, however, critical to stay alert and informed so you do not fall victim to malicious attacks.
A few decades ago, no one would have thought the world would be where it is today. As even the smallest of businesses adopt cashless transactions, a cashless society is on the horizon. People pay many of their bills electronically, so why not extend the same to your business? The earlier you start incorporating these methods of payments, the better your chances of huge success as an evolving business.