Digital solutions, including online payment, cashless payments, and mobile banking, are the go-to option for consumers who need a contactless experience in social-distancing times. Customers’ shopping behavior reflects the uncertainty of the crisis, with fewer visits to retail stores, the supermarket, and implicitly volume transactions. Thanks to the pandemic, customers are experiencing convenience with contactless cards and reducing the time spent in front of the cash counter.
In response to the COVID-19 pandemic, banks and retailers worldwide are considering raising the limits on customer card transactions with zero or minimum transaction fees. Process high-value transactions quickly without touching a PIN Pad / POS terminal. The Financial Conduct Authority (FCA) has been supportive and approved the need for a contactless transaction. Contactless payment has allowed customers to tap and go on any purchase value, leading to a higher conversion rate for the merchants. However, this might also lead to deeper concerns regarding potentially fraudulent activities and cybercrimes. With no additional exposure to either the merchant or consumer, given the risk from fraud sits with the card issuer for contactless transactions. Raising the limit would see a noticeable impact on fraud as consumers are prompted to enter their pin when making more than five consecutive contactless transactions.
Types of Cashless Payment
There are various ways by which a user can make payments without cash. If we go through history, we will find that cashless societies have existed since the nascent stage; the barter system. In today’s period, cashless payments are possible due to credit/debit cards, payment apps, PoS terminal, internet banking, mobile banking, and many more.
Banking cards such as Debit/ credit cards are one of the frequently used cashless payments worldwide. They provide various benefits like secure payments, convenience, rapid, transparent, and many more. However, the most significant advantages of bank cards are for making other digital payments and contactless transactions. For example, a customer can save his card information on the mobile phones via payment apps and make a cashless payment anytime, anywhere. Bank cards are also used for online purchases, PoS machines, and online transactions. Currently, there are MasterCard, Visa, and Rupay when it comes to banking cards.
Mobile Payment Apps
Mobile Payment applications are quickly gaining popularity due to their rapid, secure, and convenient payment methods. The mobile payment apps allow the user to send and receive money anytime, anywhere, with an internet connection on the device. They can manually add or store money in their wallet by syncing with their bank account. Moreover, the user can also send money to friends, family, or any other person by adding their mobile phone number or scanning a QR code.
Similarly, the user can make payments to merchants and make additional payments such as utility bills, house rent, and many more directly from the mobile payment app.
Contactless payment is a convenient and secure payment method that enables customers to purchase products by tapping a card near a PoS terminal. This card can be a debit card, credit card, or smart card with an NFC (near field communication).
feature installed. These payments card more convenient as they do not require any PIN or verification. Moreover, via NFC enabled contactless payments, users can directly link it with a mobile payment app and use it at various places such as Field Service, Airlines Industry, Retail Industry, Accounting Firm and many more.
PoS terminals are handheld devices present at any commercial store. They are used to read the banking cards of the users. But these days, its scope is expanding as they are available on various mobile platforms via the internet. They can be bifurcated into different forms like Physical terminals, Virtual Terminals, Mobile PoS, etc. Mobile PoS is beneficial for small businesses as they do not need to spend money on expensive electronic registers as it operates via smartphones and tablets. Similarly, Virtual Terminal via web-based applications for its operation.
Benefits of Cashless Payment
Reduce expenses and minimize business risk. Cashless payments help eliminate several business risks, such as theft of money by employees, cash robbery, and forgery money. Moreover, it also minimizes the bank’s security and cash withdrawal cost, including its transporting and counting hassle.
Maximize Transaction Speed
Cash Payment has been time-consuming for both customers and merchants. Time-saving is the main reason why most businesses have decided to go cashless and leverage the power of digital transactions.
Transparent international Payments
Whenever anyone visits a different country, he/she needs to buy the foreign currency. But, with cashless payments, they no more have to do it. The cashless payment apps make the transaction seamless following the currency exchange rate.
Eradicate the Middleman
The cashless society is a broad term, and it is more than shifting from cash payment to cashless payment. The one reason behind this shift is to eliminate the middleman involved in the processing of the transactions. There will be an exchange of value in a cashless society without any processing or transaction cost, and everyone will have access to capital. The cashless society will play a pivotal role in achieving worldwide financial inclusion with money transfer and banking payment.
A truly cashless society appears to be years away. However, a significant FinTech advancement could shorten the period. With cutting-edge technology and constant improvement of existing technologies, we might see faster, secure, and more transparent cashless payments than ever.
CloudBanking Payment processor provides various payment options and is ideal for the organization where there is a large volume of transactions in a short period. It provides a transparent process to implement and is quick and easy to integrate without overhauling the existing payment technology. Its physical terminal of a cashless system simply sits on top of the current payment equipment, making it ideal for installations at retails, clubs, and venues of any size.