Here’s an interesting fact: as of mid-2015, nearly half of Australian businesses were accepting digital payments from customers using Paypal or some other similar digital wallet/mobile app.
Out of the businesses that have been taking these alternative payment methods, 64 per cent describe them as critical to their business.
More than most countries, Australians have willingly embraced modern payment technologies. A recent report by Visa found that Sydney and Canberra as cities that are among the most advanced in the world when it comes to adopting digital payments.
Customers are demanding the ability to pay digitally (in a variety of ways as well) and while many businesses large and small are rising to meet that demand, there’s still a fair amount of resistance among many industries, particularly in hospitality and retail.
Digital payments are the new norm
Digital wallets have shown themselves to be more than just a passing fad. And if you’ve been in business for at least the last five years, you’ve seen how quick your customers are to adopt new payment technology.
Here’s a quick timeline to illustrate how the cashless movement has caught on in Australia:
With all signs pointing to a country that is losing interest in using cash, it begs the question (to cash-only businesses): what are you waiting for?
Common barriers to adoption
The transaction fees are too hefty
Service fees and transaction costs may vary depending on the bank or card provider but laws implemented in 2016 have made it so that the fees merchants are charged are relatively small, and can be passed on to your customers as part of their transaction.
As a guide, accepting a Visa or MasterCard debit card may cost around 0.50 per cent of the transaction value (or 50 cents for every $100 transaction), and 1–1.5 per cent for credit cards.
By accepting electronic payments, you are basically guaranteed payment. You’ll also reduce the costs and hassle associated with handling bounced cheques, as well as storing, counting and safely transporting large amounts of cash from your business to the bank.
It’s too complex to set up a system that accepts digital payments
There’s a common misconception that setting up the systems to accept alternative payment types is overly complex and disruptive to business operations. The truth is, there’s a breadth of solutions available on the market that have proven to be easily installable and affordable for hospitality businesses of all sizes.
You can order a CommBank Albert EFTPOS tablet online within minutes for example, and this device (designed specifically for hospitality and retail businesses) lets you accept cash or card, split bills, add tips, and print or email receipts to your customers.
The Albert tablet also integrates directly with a number of popular POS software, including Kounta. So if you’re using a supported POS, it could be a matter of clicking on the right buttons to get them both talking to each other (electronically that is).
The best part, you can receive same-day settlement on transactions made until 10pm AEST into your CommBank business transaction account.
It’s too risky to accept electronic payments
We’re not gonna lie – as digital proliferates globally, electronic payments make some fraud a possibility. That’s why banks, point of sale companies and other payment processing businesses today employ rigid security measures to protect the data they deal with, including SSL encryption, rigorous data backups, network redundancies and other preventive measures.
EMV technology has made using credit cards more secure than ever (unlike magnetic-stripe cards, an EMV card chip creates a unique transaction every time it’s used that can’t be replicated). Mobile payment systems, which generate a unique proxy for each enrolled phone handset (that can’t be used independently by criminals) are even more secure than card payments.
The question to ask – in a time where cashless transactions are extremely popular and fraud protection/data security technology are also rapidly evolving – is, are you losing out by only accepting cash?
Research by Mastercard Australia showed that credit and debit card transactions are 4.5 and 2.5 times larger than cash purchases respectively. Purchasing with plastic – termed by some as “friction-free spending” – is also easier compared to using cash in some scenarios. For example, paying for a $5 cup of coffee at Starbucks might seem like a lot if you’ve only got $10 cash in your wallet, not so much if you’ve got a credit card with a $10,000 limit.
Social scientists have also found that consumers are conditioned by the sight of credit card logos to want to spend more.
Case Study: Pablo & Rusty’s Cashless Café
Australia-born Pablo & Rusty’s Coffee Roasters (or P&R), is a coffee business that’s run like a tech company. With a roastery and cafés operating at a fast pace, the speed of electronic payments is a crucial factor. So in 2016, P&R opened a cashless café in Brisbane, the first ever in Australia.
One of the challenges P&R faced as they prepared to open their cashless venue was finding a payment solution with hardware that was easy for their servers to carry around. This is so the waitstaff could process card and mobile payments tableside, instead of wasting time going back and forth from the counter to process transactions.
P&R eventually settled on using Mint Payments, which comes with a card reader device small enough to fit in anyone’s pocket. The device also connects directly to smartphones and tablets via Bluetooth, accepts both EMV (Chip and Pin) and NFC (contactless) payments, and offered next-business-day settlement for any Australian bank, which meant very little to no business disruption.
Mint Payments also integrated seamlessly with their Kounta point of sale, making it easy for P&R to clearly see and all cashless transactions. The results? The staff at P&R’s Brisbane café no longer has to deal with the hassles of handling cash, everything is recorded digitally in the point of sale for easy reconciliation, and customers enjoy an enhanced service experience.