While we haven’t become a cashless society quite yet, there’s no denying the rapid pace of change regarding how most of us prefer to buy products and services.
The ready availability of debit cards, credit cards and a diverse range of digital payment services means that customers have never had more cash alternatives to choose from. So, no matter what small business ideas you’re bringing to life, whether you’re interested in how to make money online or you’re meeting customers face to face, it’s vital that your payment options keep up with current expectations.
But what are the best cashless payment systems currently available for online and in-person transactions, and what are the major cashless payments benefits for your brand and bottom line?
We’ve got you covered in this guide, providing a quick overview of the cashless payment solutions to consider if you’re gearing up to start a business, or are already trading and looking to diversify your payment options.
Studies consistently highlight the significance of cashless payments. Recent research by the British Retail Consortium revealed that cards now account for the “overwhelming proportion” of money spent in the UK (85%), while a survey by LINK shows that the number of people who don’t carry cash has trebled since 2019.
What are cashless payments?
As the term suggests, cashless payments are any purchases made without physical money changing hands. While the concept is far from new, with modern credit cards dating back to the mid-20th century, cashless payments have skyrocketed in recent times.
The rise and rise of cashless transactions has been spurred by factors such as the popularity of online businesses and e-commerce, increasingly generous transaction limits for contactless purchases not requiring PIN numbers, and the growing use of digital wallets for both in-person and card not present transactions.
Cashless payment systems can be grouped into three main categories:
In-person cashless payments, where customers make purchases using card machines or smartphones.
Online payments, where customers make bank transfers or provide their card details using payment gateways on e-commerce sites.
Card payments over the phone, where businesses enter their customers’ details into a virtual terminal.
Cashless payments benefits
Given how they’ve become the norm, the advantages of cashless payment solutions for small businesses may seem self-explanatory. But it’s worth breaking down the exact reasons they’ll give you the edge over both cash only businesses and those which have fewer cashless payment systems in place.
More convenient for customers
Providing great products and services is only part of the equation when it comes to running a successful business. There’s also the issue of convenience, which can be critical to both customer acquisition and customer retention.
Let’s say you’re a passionate cook and decide to launch a food truck serving top-notch tacos. Your truck is attractive, colourful and eye-catching, and your recipes have been thoroughly taste-tested to perfection. But if you don’t accept card payments, chances are most potential customers will simply stroll on to rival food trucks and stalls close by.
Or, say you’ve started a side hustle as a painter and decorator, and are able to take cashless transactions through a portable card reader. This will save your customers the effort of going to ATMs, means you’ll provide a more convenient service than your rivals, and be a more attractive choice than cash-only competitors in your area.
Boosts workplace efficiency
As well as making for good customer service, incorporating cashless payments solutions also has a positive impact when it comes to how to run a business.
Cash tends to be more cumbersome to deal with than electronic payments, both when it comes to handling notes and coins and providing change at the till, and in terms of totting up your takings for accounting and small business tax purposes.
By contrast, the checkout process is more streamlined when customers can simply tap their cards and phones to make purchases. Taking cashless payments will also mean enterprises have an automatic digital record of every transaction, which makes bookkeeping for small businesses a lot more straightforward.
Sales records at your fingertips
Having an efficient point-of-sale system in place makes it even easier to track sales. As well as making checkout a breeze thanks to a contactless card reader, SumUp POS Lite issues digital and paper receipts, and provides sales and payout reports which you can consult and download whenever you need to.
Encourages bigger basket sizes
The term “basket size” refers to the number of items purchased in a single transaction by a customer. Across the decades, research has consistently shown that the easy, “friction-free” nature of cashless payments tends to inspire bigger basket sizes, and even make customers more amenable to higher prices.
Back in 2001, before e-commerce had even become the norm, a landmark study on credit card spending habits found that people are happy to bid twice as much on an auction if they were able to pay by card than by cash.
In a much more recent survey, the majority of people polled said they’re more likely to spend more in single transactions when paying by card, with the propensity for impulse buying doubled during such transactions.
With this in mind, implementing a good cashless payment system can be as vital to boosting your bottom line as having the right pricing strategies in place, helping to generate the financial resources which will allow you to scale your business.
Enhances security
One of the drawbacks with physical cash is that it’s vulnerable to theft, either by outside parties or staff members.
Research reveals that workplace thefts in the UK have unfortunately risen in recent years, with business owners advised that they can lower the risk by ensuring employees feel valued within a positive working environment, and by having robust verification processes for transactions.
More cashless payments means having less physical cash to safeguard. Electronic transactions will also be protected by state-of-the-art payment security measures. For example, SumUp adheres to the Payment Card Industry Data Security Standard and utilises the 3D secure protocol to authenticate payments, cutting the risk of debit and credit card fraud.
Types of cashless payments
Whether you have your sights set on side hustle ideas or have made the leap to becoming your own boss full time, here are some of the cashless payment systems which make it easy to take payments both remotely and in-person.
Card readers
These days, having an efficient, reliable card reader for taking both contactless and chip and PIN payments is a must if you deal with customers face-to-face. Given that card payments now make up the majority of transactions, implementing card readers will improve your customer experience at a stroke.
Different types of card readers are offered by banks and merchant services specialists like SumUp. For example, the SumUp Air or Solo Lite functions by connecting via Bluetooth to your smartphone or tablet, while the more advanced SumUp Solo is a fully standalone device utilising WiFi and mobile data.
The SumUp Solo also has smart tipping and sales reporting capabilities, and it’s also possible to incorporate a printer so receipts can be produced wherever you are. This ideal if, say, you specialise in things to make and sell and need to produce receipts at markets and craft fairs, or you run a food and drink business taking payments at diners’ tables.
Contactless phone payments
Customers can pay through their smartphones by tapping them on card readers, but it’s also possible to receive payments via your own phone. For example, SumUp has a pair of cashless payment solutions providing this functionality, simply called Tap to Pay on iPhone and Tap to Pay on Android.
No extra hardware is required to use Tap to Pay. It’s simply a matter of downloading the SumUp app and activating the function. Customers can then tap your phone with their card or phone, exactly as they would with a conventional card reader.
As there are no setup costs for Tap to Pay, it can be a great way to try out cashless payments for a fledgling business, or if you’re looking to make money on the side and don’t want to invest too heavily in equipment to start with.
QR codes
Payments via QR codes aren’t as ubiquitous as chip and PIN and contactless card payments, but this can work in your favour. If a quick competitor analysis reveals that rival businesses don’t tend to accept purchases through QR codes, you can immediately set yourself apart by offering this service.
This can be a major plus for your business because QR code payments are arguably even more convenient than contactless card payments. Instead of having to root around for debit and credit cards, customers simply scan the codes with their phones to make payments.
Unique QR codes for your business can be generated through the SumUp app, then printed and displayed on your checkout counter or anywhere else in your shop or eatery. QR codes also make a handy fallback if for any reason your card machine isn’t working and you need a temporary substitute.
Self-service kiosk
As we mentioned earlier in this guide, cashless payments in general are more likely to lead to bigger purchases compared to cash transactions. If you run a quick-service food outlet, you can boost purchases even further by taking payments through a self-service kiosk.
As well as allowing customers to make orders and pay through the touchscreen interface, a SumUp kiosk will also make suggestions for additional purchases, leading to orders that are on average 25% bigger than those made verbally. Kiosks can also reduce queuing times by half, letting you provide the kind of speedy service that inspires customer loyalty.
As well as providing extra customer convenience and enhancing basket sizes, kiosks also free up your staff to focus on other tasks, reducing mental load and helping create a less pressurised workplace culture.
Online store payments
Online stores are the basis for many great business ideas from home, though you might also set up your virtual stall to complement a brick-and-mortar establishment. For example, opening an online version of your high street fashion boutique could form a part of your business growth strategies.
In any case, being able to accept cashless payments online in a safe, secure way will be vital to your online store’s existence. SumUp offers plug-ins for major e-commerce platforms such as WooCommerce, Wix and PrestaShop, so you’ll be able to quickly integrate SumUp’s cashless payment solutions and start generating online cash flow.
Payment links
Online payments aren’t restricted to static payment gateways at online stores. You can also utilise a more flexible cashless payment system known as payment links, which as the name suggests can be shared with your customers just as you might share website links with your friends and family.
Say you’ve been brainstorming low cost high profit business ideas and decide to set up your own web design company. If your clients include individuals or small businesses which want to keep the payment process as simple as possible, you could cater to their requirements by sending payment links via email or WhatsApp.
Clicking these links will then take your customers to a secure payment gateway, allowing the transaction to happen without the need to download an extra app or create a new account anywhere.
To take another scenario, imagine you’re exploring hobbies that make money and get into selling custom illustrations. If you find that most of your customers are finding you through Instagram, you can incorporate payment links there so people browsing your posts can go ahead and buy with minimum friction or hassle.
Gift cards
Just as using payment links allows cashless payments to become integral to how you use social media for small business success, so too will gift cards make cashless payments a core component of your small business marketing strategy.
SumUp’s virtual gift cards work in a similar way to payment links. You just post a link to your gift card page on your business website, social media pages or in direct communications with customers. They’ll then be able to purchase gift cards, personalised through a choice of designs, which will be emailed to the recipients.
As well as adding to your operating cash flow, the selling and sharing of gift cards will also make your business known to more people, increasing the visibility of your brand.
FAQs
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