Features like bill splitting in apps like Uber and Monzo mean we don’t even have to hand over cash to friends and family when going out for dinner anymore either. This rising trend in cashless transactions is fuelling the flames of the cashless revolution so in this blog post we’re asking what are the pros and what are the cons of cashless retail?
Cashless retail has been pioneered largely by the likes of Amazon who have introduced entirely cashless stores in places like the US, in their drive to embrace technology and innovation. The reaction to this move has been mixed to say the least and this demonstrates that while a few forward-thinking businesses may think it’s time to go cashless, others are not so sure. As with any good debate there are just about as many pros as cons for cashless retail at the moment, so here’s how each side of the argument is stacking up…
The cons for cashless retail
- The increase in the number of credit-card transaction fees that will be required by going cashless could see some smaller businesses unable to foot the bill, ultimately leading to cashless retail at worst putting some businesses out of business or at best, rendering businesses financially unable to fully embrace the cashless phenomenon.
- More credit card transaction fees could also see product prices increase as businesses strive to cover the costs of a cashless model.
- For consumers, the greater disassociation cashless spending can create, may see people over-stretching themselves and spending more. This could be seen as short-term benefit for retailers as they may see average order values peak, but if overspending leads to consumer debt, then it soon turns into a slippery slope.
- Using credit cards and mobile phones as opposed to paper and coins also requires a bank account and for some people in the world, securing a bank account is much easier said than done, with requirements like maintaining a minimum balance, having the right credit score or being able to make regular deposits meaning it’s actually quite exclusive.
- Cashless transactions also rely on telecommunications and electricity unlike cash payments so in the event of a natural disaster for example, the infrastructure needed to facilitate cashless payments could be rendered useless.
The pros for cashless retail
- The younger generation are much more in turn with cashless retail, reportedly preferring the convenience of credit cards over cash. That means adopting cashless retail now, could see businesses being better prepared for the next generation of shoppers.
- It sounds simple, but not needing to carry cash could in itself be a benefit. If you drop a £10 note on the floor and don’t notice, chances are you’ll never see it again. That money is well and truly lost, but in a cashless environment, credit card and bank statements mean it’s much easier to keep track of where all your money is and where it’s going.
- Speaking of keeping track of your money, mobile, credit and debit card payments are actually more secure than you might think too, with providers often having tight security measures and strong infrastructure in place to support it. Better still, if you do notice any lost funds, the bank will often reimburse you so you’re rarely out of pocket.
- Cashless transactions can help build up a strong credit score, which in turn can open up other opportunities like getting on the properly ladder, overall leading to a bigger and better economy.
- Many providers and retailers will reward you for going cashless too and who doesn’t love a good freebie? Free drinks, cashback on purchases and even racking up free air miles are all perks of going cashless, so you could say you’re getting more for your hard-earned money and for businesses, their gaining repeat custom and greater brand loyalty.
- Paper money and cash is notoriously dirty… so going cashless could be better for our health too!
So, there you have it, the two sides of the cashless retail debate. If you’d like our two pence worth, we think businesses should start to invest in cashless retail technologies sooner rather than later but for now, we’d embrace cashless transactions alongside cash transactions, to enjoy the best of both worlds for just a little while longer.
Will you be embracing cashless retail?