Are We Moving To A Completely Cashless Society?
A lot of franchises are moving to a completely cashless operation, including the likes of Dollar General and Family Dollar. Pizza Hut is one of the world’s biggest franchises; three-quarters of the 13,000 Pizza Huts around the world are franchise-owned, and they are strongly encouraging cashless payments, with many having made the move to cash-free establishments already. Is this a sign of the future?
Cashless is more hygienic
COVID-19 has undoubtedly accelerated this trend. Cash has come under scrutiny because it increases contact between people. There have even been rumors that authorities in China wash and destroy banknotes that have possibly come into contact with COVID-19.
Franchises around the world are being forced to re-think the use of cash, as the virus could be transmitted through the hand-to-hand exchange of physical currency.
The move to cashless has been on the horizon for quite some time
A lot of people will argue that the coronavirus has only sped up the inevitable. After all, a lot of franchises were already embracing the move to cashless. You’ve probably already noticed “card only” payment signs in many stores. Back in 2015, cashless payments increased by 10 percent, a number we can imagine has risen sharply in 2020.
The introduction of contactless payments has accelerated this trend, offering a much quicker and more convenient payment solution for small purchases.
Did you know that in the UK last year’s contactless payments accounted for 40 percent of all card transactions? (BBC) The UK is ahead of the US with the contactless trend, which indicates what is to come in the United States.
Although contactless may not have been embraced fully worldwide, most people do not carry cash on them today, and those who do have less than $50 in their wallets. U.S. Bank surveyed 2,000 people, discovering that every one in two people usually don’t carry cash with them.
Some companies are even looking at ditching cards as well. 7 Eleven launched a concept store in Australia that is cashless and cardless. Consumers can only complete transactions using their smartphones. The store was launched in June, 2019, with the purpose of eliminating queues. It will be interesting to see if other businesses follow suit.
The benefits of a cashless society are more extensive than you may think
There are so many reasons why businesses should consider going cashless. For franchises, this gives them the perfect opportunity to get incredibly valuable insights into spending habits, budgets, preferences, and patterns.
For those involved in the event industry, going cashless also solves the problem of knowing who the ticket buyer is. With cash, anyone could buy a ticket, meaning you have no idea who truly attends the event. This issue can be eradicated with debit and credit card payments only.
The end of cash-based criminal activity
There are plenty of other benefits that are associated with a cashless society from a social perspective. One of the main areas of potential transformation is the end of cash-based criminal activity.
Many criminal acts are associated with cash, including bank robberies and pickpocketing.
Statistics have shown that pickpocketing has increased in a number of places around the world, especially in the United States. More than 2,100 pickpocketing reports were filed by Chicago transit police in 2018. In San Francisco, there has been an 8% rise in pickpocketing incidents.
By relying on payment cards, though, we can expect to see this activity reduced. If a card has been stolen, it can be blocked right away, whereas if cash is stolen it can be spent pretty much right away. Plus, if there is a fingerprint biometric sensor on the card, the criminal won’t be able to access it in any case.
Faster and more secure transactions
Less cash also means more secure and faster transactions. We have all found ourselves stuck at the back of a queue that is irritatingly long, especially around the festive period. You’ve probably found yourself having to grit your teeth while someone counts out their cash at the till.
A more efficient checkout process is encouraged by limiting payment methods to cashless only. It will get rid of the hassle of having to carry around cash and counting it out for the consumer.
Tracking spending becomes easier for consumers and businesses
Plus, tracking your spending can be difficult when you are paying in cash only. Paper receipts often find themselves being thrown in the bin or lost.
It is so much easier to monitor your spending with credit cards and debit cards because of online banking. Some banks even provide online services so you can track and manage your spending effectively.
This is beneficial for businesses as well, as it makes it a lot easier to track their expenditure for tax purposes.
Learn more about your customers and enjoy improved shopping experiences
Improved online behavioral profiles can also be created. By collecting extensive data via card transaction histories, the benefits are twofold.
Firstly, consumers are going to benefit from a shopping experience that has been tailored to their needs.
Equally, companies will be able to use this insight to build loyalty and maximize sales by tailoring their services and offers to address the spending habits and preferences of their consumers.
An effective way of combating money laundering
A cashless society means that there is going to be a reduction in money laundering. It will be much more challenging to get away with this high-level financial crime, as there will be a clear and evident data trail for every payment a financial institution receives.
This is going to enable reputable and credible companies to avoid getting caught up in scrutiny from authorities by being involved with criminal enterprises without intention.
Plus, money laundering can end up giving an unfair competitive advantage to front-businesses that are making extra earnings via illicit activity.
Save money and time by eliminating cash handling management
Companies can experience labor time savings associated with no longer needing to manage cash and worrying about protecting large sums of money.
Handling cash can be time-consuming, and it can be costly, too, especially for small companies.
Increase the average transaction value (ATV)
Finally, retailers will also benefit from an increase in the average transaction value (ATV) associated with card payments.
This is because people are less likely to make small purchases when they are paying with cash. They may not want to break into a large note or have the right amount of money to hand. You don’t have to worry about this with card payments.
Card payments also mean that customers are less likely to make impulse purchases at the till.
When will we see a cashless society?
It may seem that we are a long way from becoming an entirely cashless society, with government rules and pushback. However, a lot of franchises have already made the move and the government will not be able to push back forever. Over the next year we’re going to see a significant shake-up that will drive us towards fully ditching physical currency; an example of this will be the introduction of smart fingerprint biometric payment cards. Getting ahead of the curve now is imperative for businesses to stay relevant in the long run.
So there you have it: an insight into the cashless society that is on the horizon for people today. There is no denying that more and more businesses are going to be moving toward cashless, and so this is something that all franchise owners need to think about. As you can see, the benefits are extensive, not only for the business but also for the consumer.
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