Cashless Payment Technology Accelerating Growth for Small and Medium Businesses

Gone are those days when a trip to the ATM was mandatory before you could visit a local store to pick up mundane items. Small and medium businesses are adopting trending technologies at a fast pace, which in turn are redefining consumer behavior. Modern consumers prefer to opt for cashless purchases and expect even small size companies to adhere.

Fortunately, the advent of less expensive and simple technology allows local businesses, including sole traders, to sell their products and services quickly and easily, whether it’s a small item or a more expensive impulse purchase.

Statistical data shows small businesses have traditionally averted cashless transactions because options were limited and merchant fees were often high.

However, with the multitude of merchant options now available and costs coming down, it is not only feasible and profitable, rather a demand of the situation to offer cashless transactions on even less expensive items.

It has required business owners to change their paradigm about cashless transactions and, to their acclaim, many have. In fact, small businesses need to be able to become more agile when it comes to payments, or they simply won’t continue to be in business.

Analysts predict that enterprises that still see cashless trading as a privilege they extend to high value sales and customers will continue to be left behind, becoming as obsolete as the paradigm driving their approach.

According to Fintech experts, within 2-3 years, accepting cash only will indicate little more than that you are trying to dodge tax because there will be no other legitimate reason to holding this stance.

Adopting different payment technologies will not only create more opportunities for growth but also help small businesses retain their local charm and charisma. The biggest opportunity is that cashless transactions encourage more spontaneous expenditure.

There is no need for technology use to come at the cost of service levels and a sense of local connection. If the transaction is seamless, easy and fast, this frees up businesses to focus on engaging, serving and delighting their customers rather than simply transacting with them.

Rahul Kumar is the owner of New Town Grocery Store having multiple outlets offering home delivery as well as pickup from store. He says customers are very comfortable with cashless money transfer systems and it has now become their primary mode of payment.

“Three years ago, most of our sales were settled using cash – now it’s the opposite, most of our sales are paid for using debit/credit card, PayTM,” he says.

“Apart from being easier as people don’t have to run errands around the ATM anymore, it really helps customers understand their spending habits and also find opportunities to improve their budgeting.”

Even cashless cab services are gaining grounds at lightning speed. Earlier, even if you had the cash, cab drivers would expect you to pat the exact amount, so that they don’t need to return the balance in cash. Now it’s so different with companies like Uber, Ola and others being just a click away.

Using payment technologies offers business owners and traders more information on their customers than ever before. This implies business owners can use data to make their businesses more visible to the right customers via other low-cost platforms, such as social media.

Apart from encouraging increased spontaneity and discretionary purchases, in the coming years we are more likely to see small businesses in a position to access data on consumer spending patterns that have previously only been available to large scale enterprises.

Accessing and utilising data is not complex or expensive, it just requires knowing where to look and being willing to invest the time/effort to do so.

Another trending methodology in the payment space is that of biometric payments. Alipay in China have implemented a system where customers literally “pay by smile”, a register recognizes their face and charges a transaction to the credit cards stored against their Alipay account. The system is on trial run at the moment.

As technology moves, proves and improves at a fast pace, it’s important to keep a close watch on the trend so that you don’t lose out on important updates. Also if your business is always on the latest, you are a winner anyways….