A few years ago card payments used to be an arduous task – remembering your pin is one thing, and not forgetting to take your card back in the shops is another!
Sometimes, card payments even used to cost more than the transaction itself, as charges were added to payments taken that were less than the minimum amount. Cash payments therefore were the easiest way to go. It was easy to pay in many places, regardless of the minimum amount.
But cash has its pros and cons – it’s obviously not practical (or safe!) to carry around a lot of cash. If ATMS are not working, you’ll have to wait in the bank and withdraw the money.
However, cash has recently lost its crown as the most convenient method of payment. According to a recent article, it showed debit cards overtook cash for the first time in 2017. This is because of the increasing popularity of contactless payments.
Furthermore, the volume of cash removed from ATMs is falling fast, and customers are more likely to use contactless payments. In the UK, even at cafes and pubs, where people buy smaller value items, card payments are taking over.
Contactless payments were the main source for the increase in debit card payments, with the number of transactions almost doubling over the year. There is a popular opinion that we’re not very far from becoming a cash-free society.
Banks have welcomed the change, as the new technology has indirectly reduced cost. However, as with all computer based systems, businesses are sometimes unable to accept card payments due to technical issues. One recent afternoon, card payments would not go through in any of the supermarkets or other essential shopping places, leading customers to abandon their shopping and to empty ATMs.
The Bank of England has announced that it will introduce minimum standards for financial companies to meet situations like IT failures or cyberattacks after the recent incidents. A key thing is making sure that there is a very secure system that can withstand most of what is thrown at it, keeping in mind the security concerns for customers paying by card.
If you are running a small business it doesn’t hurt to have a card machine, as it welcomes more customers and opens the door to better opportunities as well.
Also, make sure to be prepared for worse situation as well. Make sure you let Customers know before they purchase that card machines are not working, and point them in the right direction for cash points.
Another benefit of the rise in card transactions is that your staff will handle less cash. Not only does less cash on the premises make your business a less appealing target for would-be thieves, it also minimizes the risk of staff themselves stealing from the till. Issues such as money laundering and fraud are also reduced by an absence of cash; this makes card, contactless, and newer methods such as Apple Pay and PingIt a much more secure option.
In the end, it is important to remember that no matter how common it is, contactless and card payments are still fairly new – and you still need to expect the odd note!