The ability to pay digitally has become more important than ever, as it benefits both businesses and consumers in many ways. In fact, in 2018, the Federal Reserve found that check payments had become less popular than automated clearing house debit transfers (ACH)—a type of digital payment in which money is pulled from a checking account to pay a bill. More specifically, there were about 16.6 billion ACH debit transfers compared to 14.5 billion check payments that year.
Additionally, from 2015 to 2018, the number of debit and credit card transactions increased by nearly 9% annually. And at the start of the pandemic in 2020, the importance of digital payments was even more apparent as touchless transactions were sought after whenever possible in the name of safety. Clearly, the use of cash and checks is dwindling, and there are several good reasons for that. Here’s what you need to know about why digital payment is better than cash.
Digital Payments Are Fast
One of the most apparent advantages of digital payments is how quick they are, especially for major purchases. Counting out cash can take a lot of time for both businesses and consumers. If you’re buying an item or service, you might have to count out dozens of bills, which can take a few minutes. And if you mess up the total and have to start again, you’re suddenly holding up the line! Then the person you hand the cash to has to count the bills, as well, and place them in the proper sections of the cash register. This can lead to wasted time and energy for both customers and cashiers, and could negatively affect the overall customer experience at the business.
Writing a check can take just as long. You have to get out the checkbook, wait to hear the total, and then hope you get all the information right the first time. If you make one mistake, you’ll likely have to tear up the check and start again with a new one. Then the person you hand the check to has to closely examine and verify it before storing it in the right place. And at the end of the business day, an employee has to take the cash and checks to the bank to deposit them into a checking account. All of this takes a lot of time, especially over several business transactions each day.
You can likely already see why digital payment is better than cash. It’s simply much faster. When businesses accept digital payments, customers only need to grab a card and swipe or tap it. If they’re paying online, they can enter their account information from home on their own time, meaning they’re not holding up a line at all. And the business gets the funds immediately, without having to deal with trips to the bank or days of waiting to see if a check gets accepted. Basically, one of the reasons why digital payment is better than cash is that it frees up time and makes cash flow more seamless than ever for businesses in all industries.
Another reason to use digital payments instead of cash is the sheer convenience. This is especially the case when customers are out shopping for major products, such as home appliances—or even homes themselves! After all, real estate transactions can cost a lot of money that needs to be paid as soon as possible, with no time to waste.
But when you’re looking to spend hundreds or thousands of dollars, you’re not exactly prepared to carry that much in cash. And you don’t always know ahead of time how much cash you’ll need for the product or service you’re buying. Bringing a checkbook isn’t much more convenient, as it doesn’t easily fit into a wallet like credit and debit cards do—increasing the chance you’ll lose the checkbook altogether.
It’s much easier to just bring a credit or debit card, or even use a mobile wallet via a secure phone app. This way, when consumers are ready to make a purchase, they can do so on the spot, without having to go to a bank or return home to get cash or a check first. The result is typically more sales for businesses, since when a customer has to leave to get cash, there’s a chance he or she won’t return to complete the transaction. Therefore, accepting and even encouraging digital payments is important if you want to boost sales at your business.
Another important reasons why digital payment is better than cash is the security. The problem with walking around with large amounts of cash is that if it’s stolen or lost, you’ll likely never get it back. Not to mention that if anyone knows you frequently carry cash, you become a target for criminals, increasing your chances of being hurt during a robbery. This is a concern for both consumers and employees of businesses, which is why keeping a lot of cash on hand isn’t recommended.
Checks aren’t much safer for businesses or consumers. There are many types of check fraud that can affect individuals and businesses alike. Identifying and fixing the problem can take weeks or longer, and it might affect or completely cancel a sale you thought was already done and accounted for. Then there’s the ever-present threat of a customer’s check bouncing, which can result in delays and fees that both business owners and customers have to deal with.
You can avoid these security issues by encouraging digital payments instead of cash or check at your business whenever possible. While it’s certainly possible for digital payments to be targeted by cyber criminals who attempt to steal money, those funds are usually protected by financial institutions. This means you know you’ll eventually get the money back, which isn’t usually the case with stolen or lost cash.
Plus, online payment processors take the time to verify identities and ensure there’s enough money in the account before your business accepts the transaction. This offers some protection for businesses that can’t afford to risk the delays and fees that come with bounced checks, and need to know that every transaction will successfully go through.
As you can see, there many reasons why digital payment is better than cash overall. Paying digitally benefits not just businesses, but also customers. Whether you need help keeping real estate transactions seamless and quick or just want to make it as easy as possible on your customers to buy from you on a regular basis, digital payments are important.
At paymints.io, we’re aware of the many reasons why digital payment is better than cash, which is why we’re proud to offer a fully electronic, secure way to pay for products and services. If you want to find out more about what we can offer you, please feel free to schedule a demo with us today!