The Increasing Adoption of Cashless Solutions by European Businesses

As explained in our previous post ‘What Will EU Mobile Payments Look Like in a Post-Pandemic World’, the ongoing global health crisis played a crucial role in bringing contactless payments and other cashless solutions into the mainstream. When the pandemic broke out across Europe earlier this year, one of the things the World Health Organization advised people to do was avoid using cash.

As a consequence, these non-traditional payment methods became better known to the wider European population. While such solutions will definitely help both businesses and individuals in curbing the negative public health impacts of the pandemic during these trying times, cashless solutions offer a lot more benefits especially to businesses that are trying to bounce back from the economic effects of the outbreak.

Even before the pandemic drastically changed our day-to-day lives, cashless solutions have been a buzzword for many years now, and for a very good reason. Tech writer Chad Hensley explains that aside from reducing friction points, cashless solutions also provide greater efficiency and convenience for both merchants and customers. For instance, in a small store where contactless payment methods are employed, cashiers would no longer have to waste time counting bills thereby reducing wait time.

On the other hand, customers wouldn’t have to fish for bills and coins and instead just tap their cards or phones and then go. Additionally, these non-traditional payment methods can also help businesses attract more customers. After all, we reported that there were more than 1.5 million contactless transactions every day in Ireland during last year’s Q3.

In an interview conducted by Business.com, Electronic Transactions Association CEO Jason Oxman shared that security is another significant advantage of cashless payment methods. These payment methods will not only reduce the risks of loss that are inherent in cash payments such as theft but also lower the incidences of other financial crimes such as money laundering and fraud.

This is because it would be nearly impossible to hide income or evade taxes if all financial records are digitised. He further added that businesses could also cut costs by introducing self-checkout or cashier-less counters that are powered by contactless payment-enabled devices.

If you are one of those owners whose business is also active in the digital space, alternative payment methods can mean even more benefits for your company. For instance, it would set you up for the future, especially if you are planning to expand globally. Trusted payment provider FIS Global explains how providing alternative payment methods can help users become repeat customers, both at home and across the world. For example, by supporting different currencies through digital payment options, you would be able to avoid hidden international transfer fees, limit lost funds in currency conversion, and reduce cart abandonment, refunds and chargebacks – all of which would increase customer loyalty.

Of course, like most things in life, these advantages are coupled with disadvantages. The Balance notes that cashless solutions can possibly heighten the different threats to the data privacy and security of consumers, especially since some contactless cards can be used without any form of authentication. Since these payment methods are highly reliant on different high-tech devices, technological problems such as glitches, outages and other innocent mistakes can also be a cause of concern.

On top of all these disadvantages, one of the things that could effectively hamper the adoption of cashless solutions by businesses, particularly small ones, would be inequality. With contactless cards and other digital wallets connected to bank accounts, the poor and unbanked percentage of the population would have a hard time adjusting to the cashless solutions being adopted by businesses – both in spending and receiving money. Fortunately, The Guardian details that institutions that support the impoverished are already looking into the different ways cashless payments can be used to the advantage of the poor. This includes a platform that allows people to donate money using an app.

As the above article shows, cashless payment options are the future of both business and society in Europe. Expect huge steps forward in the near future.