How Businesses Should Adjust as the World Goes Cashless

Talk of the demise of cash payments has been going on for a while. Last year, an analysis on FinTech Magazine went as far as to suggest that “the first truly cashless society” could become a reality by 2023. This proclamation was based on a report by a global consultancy, and was based largely on the rapid pace at which cashless transactions are increasing.

2023 may seem a little soon to see a full cashless society. And while we aren’t even remotely close to such a thing, it’s worth considering what it means. Does the term “cashless society” refer to something literal, or to the vague notion that we’ll continue to use more electronic payments? There really isn’t a concrete definition, though a Gala Casino blog post on a cashless society may have actually described the idea best. The post discussed MasterCard research on countries in the “advanced stage” of cashless transition, highlighting Singapore, the Netherlands, Sweden, France, and Britain. It defined such countries as places where the “culture, financial services, retail facilities, and infrastructure” are all ready to embrace entirely digital payments.

That’s about the most comprehensive definition we have, and it does point to a more literal interpretation of the phrase “cashless.” And considering things in these terms, it becomes a little bit clearer not only that businesses will need to adjust — but how they’ll need to adjust.

Improving Consumer Convenience & Security

First and foremost, in consumer-facing situations, businesses will need to make an effort to make cashless payments as convenient and as secure as possible. Regarding convenience, this means ensuring that multiple contactless pay options are provided, supporting different debit and credit cards, digital methods like Apple Pay and Google Pay, and possibly even third-party processing apps (like Venmo or PayPal) or cryptocurrency. As for security, it will be increasingly important to build in robust verification requirements as well. In 2018, an article on cashless payments by The Irish Times quoted a card payment specialist expert as saying that most payment transactions will require two-factor authentication. This is expected to be the new norm, and will help to improve consumer convenience — as well as make consumers feel more secure about going cashless.

Advertising the Shift

The transition to cashless payments is going fairly gradually. That is to say, consumers and businesses alike are being brought along at a comfortable pace, with many people naturally adapting to change. That said, it is still in the best interest of businesses of all kinds to advertise their own shifts toward full contactless transactions. One of the risks for businesses, at least in the early days of “cashless society,” is getting rid of cash payments in a way that catches customers or partners by surprise. This can result in lost business, whereas advertisement of a full cashless shift allows any and all related parties to be aware in advance of how they’ll be expected to pay.

Boosting Fraud Protection

Cybercrime is more and more sophisticated, and should be a primary concern of any business operating in the digital world. This topic was covered in the article ‘5 Effective Ways to Arm Yourself Against Online Frauds’ here last year, and if anything it’s even more important today. Moving forward though, businesses will need to consider cashless transactions when considering cybersecurity and fraud protection as well. While not likely or common, point-of-sale machines, accompanying apps, and digital transactions can all be vulnerable to theft or corruption. Business leaders facilitating cashless transitions should keep this in mind and go to every length to protect transactions, and by extension customers.

Adjusting Data Collection & Analysis

Finally, businesses practicing data analytics should also plan to adjust operations to include information gleaned from cashless and digital transactions. These transactions are actually easier to handle in this respect, given that they can go through systems that automatically log relevant customer data, payment history, transaction amounts, and so forth. Nevertheless some preparation is needed for any business that wants to take full advantage of transaction-related data.

Transition to a fully cashless society will make for a big change, and may call for additional adjustments in time. For now though, these are some of the main things businesses can do to prepare for the shift.