Cashless payments have their fair share of risks, as you’ll come to see later in this article, and this is why Alternative Payment Methods (APMs) have steadily gained popularity.
Fun fact: a study found that, on average, banknotes contain more bacteria than a household toilet and can carry a live flu virus for up to 17 days.
If that wasn't enough to make you go cashless (or wash your hands), then maybe this will:
Link, the UK's largest ATM operator, reported that cash withdrawals dropped by a whopping 50% in 2021 due to COVID concerns and mandatory social distancing.
Whether it's for convenience or hygiene, there are plenty of reasons why consumers have chosen to go cashless - and so should you!
But before we get into that, let's take a look at:
What Are Cashless Payments?
Basically, cashless payments allow a business to receive funds from a transaction without the need to handle physical cash.
All of which is made possible thanks to something called a payment gateway. These are platforms or services that function as intermediaries that bridge the flow of cash from point A (the customer's bank account) to point B (the merchant's bank account).
So instead of having to fumble with notes and coins, cashless payments allow customers to perform transactions quickly. Besides making it a lot easier to indulge in our need for retail therapy, cashless payments are also the next logical step forwards for businesses everywhere.
Alternative Payment Methods (APMs)
However, cashless payments have their fair share of risks, as you’ll come to see later in this article, and this is why alternative payment methods or APMs have steadily gained popularity.
APMs allow customers to pay for goods and services without using credit or debit cards, and instead make use of e-wallets, fund transfer services, or bank transfers just to name a few.
Hence, this gives both customers and businesses a much greater degree of flexibility.
So, here are:
6 Reasons Why You Should Go 100% Cashless
1. COVID has become a way of life
The 4 words that describe the years after 2018 would probably be this: facemasks, lockdowns, and social distancing.
And given how COVID and other nasty viruses are transmitted primarily by touch, it's easy to see why cashless payments have taken off in a big way. Besides that, studies have also shown us that people, in general, have become a lot more concerned about personal hygiene.
And when you think about how dirty paper money is, do you want to come into contact with all that cash?
All of which shows that businesses will need to adapt to the changing times and offer alternative payment methods.
While some may refuse to move on with the times, continued mandatory social distancing and health concerns will affect consumer buying patterns.
Consequently, businesses that fail to meet this demand risk being left behind by their customers.
Key takeaways: With COVID moving to the endemic stage, businesses need to adapt to new norms by providing alternative payment methods.
2. Cashless payments are vital to the customer experience
"Ease your customers' pain"
It wouldn't be an understatement to say that customers place a premium on convenience in today's fast-paced world. Things need to move quickly and smoothly from the welcome sign to the exit.
Cashless payments allow businesses to keep queues short and checkout lines empty as there's no fumbling for cash or counting change at the checkout line while still supporting multiple payment methods.
Any holdups at checkout will likely lead to longer waiting times and a negative experience for the customer, which is why alternative payment methods are essential for providing customers with a positive experience.
Studies have shown that long, unpleasant waits can damage a customer's view of a brand and cause them to avoid queues entirely - a phenomenon known as reneging and balking.
The same applies to e-commerce businesses, where limited payment methods are often one of the top causes of cart abandonment. After all, it's hardly fair to expect customers to work around your business's limitations.
Key takeaways: Leverage the flexibility offered by cashless payment solutions to present customers with a helpful solution.
3. Increasing internet penetration
The COVID pandemic saw the e-commerce market grow exponentially and made online shopping the new normal. It also made it possible for anyone with an internet connection and a personal computer to start their own home business with minimal investment.
The secret to all of this: rising internet penetration.
A 2022 study showed us that the number of internet users grew by 192 million in just 12 months - meaning that 62.5% of the world’s population now have internet access.
Hence, all of this means that we can expect to see a democratization of entrepreneurship in the years to come as more people choose to be self-employed while also opening up new business opportunities.
All of which will be an invaluable source of revenue as competition becomes even stiffer.
Key takeaways: The internet has made it possible for SMEs and entrepreneurs alike to expand like never before but to profit from all this growth, they will need to use cashless payment solutions.
4. The growth of sin industries
While most industries suffered immensely due to the COVID pandemic, the adult entertainment and gaming sector is one area that saw exponential growth despite everything.
But, due to the nature of these businesses, they are classed as high-risk merchants meaning that fraud is a major concern for these payment providers, thus such businesses are commonly subject to high chargeback rates or ignored entirely.
Consequently, this leaves content creators on sites such as OnlyFans, adult entertainment websites, and gaming companies out in the cold. As a result, they are forced to either pay excessive rates to withdraw their earnings or accept cryptocurrencies.
However, the volatile nature of cryptos and the lack of regulation means that both merchants and customers may be hesitant to use cryptocurrencies.
Given how much money is at stake in these industries, it will only be a matter of time before cashless payment platforms come into play.
Key takeaways: Controversial industries like adult entertainment and gaming are often ignored or discriminated against by conventional payment gateways. However, platforms such as XanPay have no such qualms and can offer competitive rates to such businesses.
5. Going cashless is beneficial
Any business owner will tell you that cost and risk are two things that keep them up at night, and sometimes, these two elements are intertwined.
Take credit cards, for example - besides incurring administration fees from banks, there is also the genuine risk of fraud. And when that happens, merchants may be liable for the costs incurred by the scammer.
But it's not all doom and gloom.
With payment gateways like XanPay, merchants and customers won't worry about credit card fraud as XanPay specializes in providing customers with alternative payment methods that do not require the use of a credit card.
Instead, customers can make payments effortlessly via bank transfers without worrying about compatibility issues.
And this is because XanPay provides businesses with a one-size-fits-all solution that allows them to tap into popular local payment methods such as e-Wallets (GrabPay, Google Pay) and real-time payment systems (PayNow in Singapore, DuitNow in Malaysia).
All of which give your business immediate access to 19 alternative payment methods and allow you to expand into more than 10 different countries.
Better yet, you don't even need any technical know-how to get started with XanPay, as it's specially designed to be user-friendly and easy to set up.
But wait! There's more:
Did you know that XanPay charges zero annual or startup fees and has no foreign currency conversion fees?
That's right. Now you can focus on keeping costs and risks to a minimum while still being more competitive.
Key takeaways: Going cashless allows businesses to reduce risk exposure and operating expenses, making alternate payment methods worth looking at.
The Future Is Cashless
While we can’t claim to see the future, the chances are good that cashless payments are the next logical step forward for businesses.
With extensive support for payment systems in countries all over Asia and minimal transaction fees, XanPay makes growing your business a cinch.
So, whether you’re breaking into foreign markets or taking your business online, do it with XanPay.