Remember the old saying, “Cash is KING?” Well, we are in a time where cash is really no longer king anymore and things like credit or debit cards, digital wallets and even apps are taking over the ways in which consumers pay today. If anything, cash has become a pain to deal with, regardless if you are a consumer or a retailer. While cash may not completely go away in 5 years, it certainly may be on the road to extinction when we look at the new cutting-edge technologies that could be reality in the foreseeable future.
Let’s first take a look at the facts. In a 2017 survey, payment processor TSYS asked over 1,000 consumers which payment form they preferred. The study found that 44% chose debit cards, while 33% selected credit cards, and only 12% specified a preference for using cash.* Now if we see what is happening in vending today, we will notice that cashless is continuing to climb the charts in how consumers are paying in unattended retail terminals. In an internal study of over 250,000 terminals, we found that after just the first 12 months a cashless device was installed on a machine that total top line sales grew 23%, then after 18 total months it was at 35%, and today we are seeing 43% of top line sales growth is attributed to cashless.
So why is this happening? Well, there are two sides of the coin to look at here, the retailer or unattended retailer and the consumer. First, cash is risky for anyone who owns a vending machine or a restaurant. Retailers across the globe are seeing that if you eliminate cash, you can eliminate risk in your business. How, you might ask? It’s easy, when you eliminate cash, you eliminate:
1. Employee Theft
2. On-Hand Coin Inventory
3. Fraudulent Refunds
4. Counting Money
5. Coin or Bill Jams
6. Robbery Risks
Businesses all across the world are seeing the positive impact of removing cash that even some restaurants have signs up that say, “No Cash Accepted.”
Now let’s look at the other side of the coin, this shift in payments is also happening because of consumers. Technology gives consumers options and they prefer to pay with faster, easier and more convenient methods of payment. People now pay in a person to person relationship, so whether they are paying their friend through an app, Venmo, or bank text options. People also pay in a people to service relationship, this includes debit or credit cards, mobile wallet, NFC contactless, and even virtual currency.
So, what will payments look like in 5 years and why should you pay attention now? Payments will continue to evolve and while some of these ideas may seem crazy, they are already happening. It’s time to buckle up and prepare for what could be the new ways consumers choose to pay. Here are some ideas to consider:
1. Identity Based Payments
2. Thought Based Payments
3. Pay in Your Vehicle
4. Pay in Your Home Through IOT Devices
5. Experiential Technology
6. Cryptocurrency
7. Wearables beyond your watches like shirts, shoes, etc.
So, what can you do today? Install cashless on all your machines. Stop waiting, and just do it. The proof is there, it works on every machine regardless if it is low volume or not, and it more than pays for itself when you look at the ROI.
What can you do tomorrow? Ensure you accept and promote to consumers mobile wallet options at your unattended retail terminals. They don’t know you accept it if you don’t tell them. Know your audience and then communicate accordingly.
What can you do to prepare for the future? Unattended retail continues to grow both worldwide and in the United States. Our industry is only expanding so stay innovative, listen to your consumers, and be prepared to always invest in technology.
It’s time to ask yourself the real question, “When will you stop accepting cash?”
*Source: https://www.creditcards.com/credit-card-news/payment-method-statistics-1276.php
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