Cashless transactions have become the buzzword in the digital (eCommerce) world. Till the date, transactions such as POS (point of sale) and e-tickets were limited to brick-and-mortar businesses. But with increased digital penetration, cashless or virtual transactions have now extended to online businesses as well.
Cashless transactions are one of the fastest growing trends in the digital world right now. E-commerce businesses are adopting cashless payment methods to streamline their business processes and provide enhanced customer experiences. From complete cashless hotels to food trucks that only accept digital payments; cashless payments are becoming a prominent feature in almost every industry.
Why Cashless Transactions?
Cashless transactions are transforming the world in many ways:
First, cashless transactions are helping to reduce the use of physical cash in daily lives. This will result in less cash-related crimes and other unethical activities.
Secondly, cashless payments are helping to reduce the cost of maintaining cash. This is because cash needs to be printed, transported, and securely stored, which costs governments millions of dollars per year.
Thirdly, cashless payments are reducing paper-based documentation. This will help to improve the environment by reducing paper waste and resource consumption.
Next, cashless transactions will help to increase productivity by reducing the time required for cash management and payments processing. This is because payments are processed digitally, which is a much faster process than physical cash payments.
Lastly, cashless payments are helping to increase convenience and safety by enabling users to store their payment information online and make payments from any location. This will free people from the need to carry cash while travelling and increase the security of payment information by preventing data theft.
The Impact of Going Cashless
The benefits of cashless transactions are not limited to just the financial sector. It has also brought about a paradigm shift in the hospitality sector. Complete cashless hotels have become a reality in the world of hospitality.
Furthermore, the cashless payment trend has now extended to food trucks that only accept digital payments. This is helping to streamline the business processes of industries such as hospitality, travel, and transportation among others.
Apart from these industries, cashless transactions are also expected to impact the healthcare and education sectors in a positive manner.
Virtual Payment Methods for Online business and their benefits
Credit cards:
Credit cards are the most widely used virtual payment method in the world. It is also the most popular online payment method among consumers. The main advantages of credit cards include ease of use, better security, and convenience. Credit cards are accepted in all countries worldwide, irrespective of the currency used. This makes it an ideal choice for businesses that deal with customers in different countries. Credit cards have an added advantage of providing a record of all the transactions made using the card. This helps businesses to track purchases made using the credit card by customers.
Debit cards:
Debit cards are another type of virtual payment method that works similarly to credit cards. However, debit cards do not come with a credit line. This means that customers usually have to maintain a certain amount in their account and debit cards are mostly used for everyday purchases.
Virtual Wallets:
Virtual wallets are another convenient and secure way of making digital payments. These wallets store information about debit cards, credit cards, gift cards, loyalty cards, coupons, and rewards among others. Customers can use these virtual wallets to make online and offline purchases by paying with a single tap or click.
PayPal:
PayPal is another type of virtual wallet that is accepted by a wide range of online businesses. PayPal can be used to make online payments, send and receive money, and make person-to-person payments. Apart from making payments, PayPal can also be used to send invoices, manage money, and track finances.
Stripe & Razorpay:
Stripe and Razorpay are the digital payment methods that are integrated into an online business. These payment methods are accepted by various online businesses. Their main advantage is that they enhance the security of online transactions by storing the payment information in a virtual wallet.
Payment Gateway:
A payment gateway enables the safe exchange of financial information between customers and businesses. This ensures that financial information is not stored on the website. Payment gateways are used by all types of businesses, regardless of their size or industry.
Electronic Payment Methods for Online Businesses
This is a method of transferring money between banks electronically. This method of payment is suitable for both domestic and international transactions.
Electronic funds transfer (EFT):
This is a type of electronic funds transfer that is processed through the Automated Clearing House (ACH) network, which is a network for financial transactions. EFT is often used for business-to-business payments. This method is suitable for both domestic and international transactions.
Electronic check:
This is a payment method by which a check is sent and paid electronically. This method of payment is suitable for domestic transactions only.
Limitations of Cashless Payments for e-business
Cashless payments for online businesses have a few limitations as well.
First, not all customers are comfortable with cashless payments. Some customers may prefer to make payments through cash, even if it is more expensive for them. This can result in lost business for online businesses that are only accepting digital payments.
Second, cashless payments are not suitable for all sectors of business. The sectors where cashless payments are not suitable include agriculture, tourism, and hospitality.
The agriculture industry requires a lot of manual labour. These employees are not likely to be comfortable or familiar with digital payments. This can be a concern for online businesses that are accepting digital payments only.
Cashless transactions are not suitable for tourism and hospitality industries that rely on cash payments from customers. The tourism and hospitality industries usually have high cash usage as most customers prefer to make payments using physical cash. This makes cashless payments unsuitable for these industries.
Third, customers can lose access to digital payment methods due to issues with their internet connection or a virus. This can result in loss of business for online businesses that are accepting digital payments only.
Fourth, the processing time for digital payments can be slow, especially when a high volume of payments is received at one time. This may not be suitable for customers who need to receive their payments as soon as possible.
CONCLUSION
The cashless transactions are changing the way businesses are conducted. From brick-and-mortar businesses to online businesses, cashless payments have become the new norm.
They are expected to become even more prominent in the coming years. This is because the advantages of cashless payments outweigh the disadvantages. If you want to cash in on this lucrative trend and bring more customers to your business, you need to accept digital payments.
To do so, you can use one of the following payment methods – Credit cards, Debit cards, Virtual wallets, PayPal, Stripe and Razorpay, Electronic funds transfer, Electronic funds Transfer (EFT), Electronic check, or a Payment Gateway.
Ecommerce platforms such as QPe gives you freedom of choosing Payment Gateway for your online business with great ease. You can integrate your online business with various payments options available.
