In just one year, the U.S. economy has moved away from cash. What should have taken years is happening at a pace that is understandably hard for many businesses to keep up with. Estimates in a recent Square Inc. reveal that three years’ worth of change happened in 12 months, thanks to the COVID-19 pandemic.
“It’s not to say we’re ditching cash entirely any time soon, but the contactless payments, online ordering, and touch-free pickup and delivery we’ve come to rely on during this past year are telling signs of the forms of commerce that are here to stay on a global scale,” the report says.
What is a “Cashless Business”?
According to San Francisco-based Square, a cashless business is one where less than 5% of payments take place with cash. The rapid adoption of online and contactless payment technology is the driving force behind this shift. Square explains that once businesses move to adopt digital payment methods, they simply don’t go back.
“A year ago, there was no telling whether the sudden spike in cashless businesses and digital payment options was going to last,” says Square economist Felipe Chacon.“But today, we can look to markets where the pandemic has largely been eradicated, such as Australia, and see that the increase is sticking with business owners and consumers beyond the pandemic.”
Why Businesses are Embracing Cashless Commerce
So the next big question is: why are businesses happily embracing cashless commerce? The short answer is the consumer. The long explanation is a little more complicated.
First, the pandemic brought with it a lot of fear over using credit card terminals and spreading the virus. As a result, payment processors began increasing their technological capabilities to permit more forms of cashless payment. They have taken off since then, quickly becoming the preferred method of payment for consumers.
Fast. Convenient. Safe.
Because these transactions do not require PIN code entry or credit slip signatures, they safeguard consumers’ personal information. Without cash handling, they are also incredibly speedy and convenient.
“There is a trend to optimize around convenience,” says Zebra IQ CEO and Founder Tiffany Zhong. “It’s more about what is the most convenient for consumers. Most consumers have a smartphone and that is why there is a trend of people wanting to pay with their phones. That’s one less thing to carry.”
Blair Thomas has been a music producer, bouncer, screenwriter and for over a decade has been the Co-Founder of eMerchantBroker, the highest rated high risk merchant account processor and eCommerce merchant account in the country. He has climbed in the Himalayas, survived a hurricane, and lived on a gold mine in the Yukon. He currently calls Thailand his home with a lifetime collection of his favorite books.