Cashless Payment Methods to Consider
Advances in technology have greatly altered the payments landscape on how consumers pay for goods and services. With so many payment options available, small-to-medium-sized businesses have many choices that can best work for themselves and their customers.
Below are the latest types of cashless payments and the pros and cons of using them.
Different Types of Cashless Payments
Cashless payments are transactions that are conducted outside of the paper or coin currency.
The list of these options continues to grow as new payment technology is introduced, but below are some of the most popular cashless options:
- Credit and debit cards – the most frequently and widely used form of cashless payment
- ACH – completed through the Automated Clearing House network, this is a great option for recurring payments
- Mobile wallets – aka digital wallets, have gained popularity as a secure and convenient option for payment
- Payment apps – like Venmo, PayPal and Zelle, have gained traction beyond person-to-person transactions
- Buy now, pay later – allows consumers to spread out payments into installments without a credit check
- Checks – while antiquated, these are still used despite reduced security and delayed processing times
Pros and Cons of Cashless Payments
Any merchant looking to evaluate payment transactions needs to consider the pros and cons of which cashless options to offer to their customers.
Below is a list of some of the pros and cons to consider.
- Cashless payments increase revenue and sales for merchants who provide customers with more convenient payment options
- Cashless transactions can provide valuable insight into customer behavior via data collected through digital payments
- Increased efficiency during checkout is achieved via the fast, simple, and secure digital transaction
- Technological learning curve may be a deterrent for some merchants who may struggle to keep up with payment methods that go beyond credit and debit cards
- Can’t accept payment during a power outage since these transactions rely on the internet
- Cash doesn’t accrue processing fees like cashless payment methods do, but there is always the option for credit card surcharging to help offset the processing fees
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