How would a cashless society affect your business
With COVID being around for over12 months now, we have seen many changes in the way we do business. Recently, I went to a rugby game which was a card only event, so without a credit/debit card or a digital wallet attendees could not purchase a ticket, buy a drink or food or any merchandise.
So, what would a cashless society look like and how would your business cope? Do you know how many of your customers/clients would be directly affected?
There have been some projections that a cashless society could occur by 2022. It is interesting that the Commonwealth Bank in its’ article “Turning Point: calling time on cash” stated that the percentage of payments made by cash dropped from 69% in 2007 to 37% in 2016.
As the demand for cash decreases so will the number of suburban bank branches and ATMs. Merchants, according to research by market analysis East and Partners, saw a drop of some 46% in cash payments between 2010 and 2016.
While research by MyState Bank shows cash being used less, there is still not a large support for a completely cashless society. It is interesting that Woolworths recently stopped it trials for cashless stores due to consumer backlash and resumed cash payments by 10 March 2021.
Also, there is a significant issue in relation to indigenous people who have limited access to the internet and this number is even less in remote areas. Therefore, such a move would severely restrict their ability to deal with a cashless society. While there have been trials of card only transactions in some communities, this has been more targeted at specific social activities.
Another significant group within our society who struggle with the internet are the aging population who either don’t have computers or lack the financial knowledge to understand how a cashless world would work for them.
From the government’s perspective having regard to its desire to limit the black/cash economy it might appear a good strategy. It has already shown its desire to limit by legislation cash payments over $10,000 and there has been talk at various times at reducing or eliminating $100 notes. One could also argue that the government has sufficient powers to severely restrict the black/cash economy if it chose to, without further restriction on society rights as a cashless society brings with it significant privacy issues.
So, if you are in business what does this all mean for you as a business owner? How would it affect your clients? Do you have a large percentage of clients who are elderly or indigenous and may not have a card of any description or even have a computer to use to transfer a payment?
What do you do if your terminal goes down or worse becomes damaged and you are a small business and you are not able to replace it quickly? Recent problems with Tyro terminals highlight this point.
All these points need to be considered now, if you have not already thought of them, in order to remain on trend and contemporary within your industry.