Why are cashless payment systems so popular?

A cashless payment system refers to any kind of payment system that doesn't involve the exchange of physical currency. Long-standing examples of cash-free payments include checks, money orders, and electronic funds transfers (EFTs). Bank transfers, like automated clearing house (ACH) transfers, are another example.

These days, people are more likely to associate cashless point-of-sale (POS) systems with tools like credit cards and debit cards, which likewise negate the need for actual currency to be handled. Contactless card payments, where the purchaser simply has to "tap" their card on a payment terminal, are one specific example.

Electronic payment apps, like PayPal™, are another type of cashless system that's more familiar to modern consumers. Then, there are digital wallets, like Samsung Pay, Apple Pay®, and Google Pay™.

Cashless systems of payment have been growing steadily over the past decade, thanks largely to improvements in technology and a general societal move towards digitization. One factor is the emergence of payment processors that can quickly complete credit and debit card payments, making digital more efficient than handling cash.

The emergence of payment apps and digital wallets is another contributing factor. With these tools, consumers can easily complete transactions using only a mobile device, like their smartphone or smart watch. They don't even need to reach for a plastic card.

Finally, there's the rise of the internet to consider. As people have become accustomed to e-commerce, digital payments have become the norm when shopping. The decline in the brick-and-mortar shopping edexperience has seemingly paralleled a decline in cash payments.

Experts also theorize that the COVID-19 pandemic played a part, as growth of digital payments reached a record high in 2021 in both emerging markets and advanced economies (like the U.S.). Contactless payment methods presumably saw a jump due to concerns about the possibility of viral transmission when handling cash.

There are also country-specific factors. For example, in the U.S., the circulation of coins was severely disrupted due to the COVID-19 pandemic. The resulting shortage made it tricky for businesses to make change for cash payments.

Despite concerns about COVID-19 waning, cashless POS systems have remained popular. Businesses and consumers alike have recognized the increased convenience of going cashless—and both sides are benefiting. Advantages for businesses include:

• Faster checkout: In the past, cashiers had to deal with counting out change for every cash transaction. With cashless solutions, they save time. Checkout lines can move along faster, keeping impatient consumers happy.
• Reduced risk of accounting errors: Counting change for cash payments always comes with a risk of human error. This can lead to accounting issues. With cashless, businesses can maintain more accurate accounts.
• Improved security: Cashless payments are also a great way to safeguard business income. With cash, there's always the risk that someone might try to steal it, whether it's an employee or an external party. This is more difficult with a cashless system.
• Reduced operating costs: Some business owners assume that the fees associated with cashless payments will increase operating costs and eat into profits. However, cash can increase operating costs, due to the need to store and transfer it securely. Depending on the platform, cashless can be more cost-efficient.
• Greater consumer reach: In the future, consumers who have embraced the convenience of cashless solutions may not carry physical currency on them. By allowing a wide range of cash-free options, businesses can avoid missing out on these consumers and reach a wider market.

For many business owners, the move toward cash-free payments is also driven by customer demand. Many consumers are eager to use cashless payment systems, thanks to the convenience they offer. There's no need to fiddle around with cash.

Plus, this can increase security for consumers, too. Cashless systems can be made safer with digital security measures, like PIN codes being required for credit or debit card payments.

Cashless POS systems can be especially beneficial for certain sectors, like entertainment. When consumers go to a concert, festival, or similar event, carrying cash raises security and convenience concerns. A cashless payment system is the answer.

Billfold is a multi-purpose POS that supports cash and bank cards, as well as payment via QR code, near-field communication (NFC), or radio-frequency identification (RFID). Streamline your next event or live show with cashless payments and enjoy faster, more secure transactions that help your customers move through lines quickly.