Cash has been the main form of payment since we stopped bartering goods and commodities for other goods and commodities. However, digital currencies have caught up and have been adopted by countries like Sweden as the main way to pay for goods and services. As a business owner, you might wonder whether to go cashless, continue accepting cash, or embrace a hybrid solution. Take a look at our payment system comparison.
Cash Vs. Digital Payments: A Comparison
Cash payments are easy to understand because they involve giving a business physical cash for a product or service. These types of payments are simple for everyone involved as there is no technology or payment provider to deal with and there are no charges incurred by either party to facilitate them.
Digital payments, on the other hand, are done using digital or online options and do not involve the exchange of physical cash. These payments are also called electronic payments or e-payments and can be done through point-of-sale systems, online, or on mobile devices, and using debit, credit, prepaid cards and mobile/online wallets.
Considering Digital and Cash Payments for Businesses
In our payment system comparison, both of these payment options have advantages and disadvantages. Cash is not subject to security breaches like digital payments are since there is no system to breach. However, physical money can be stolen, even though there is no risk of sensitive details being stolen if that happens.
Digital payments are a very convenient option for many people. Customers can pay using any of the systems you have without them having to visit an ATM to get cash or to carry it around. It is also much easier for people to pay using digital means than by cash and leads to higher purchase amounts; handing physical money over is often harder than handing over a piece of plastic.
Digital payments are easier to track than cash payments. Many systems even calculate your business’s incoming and outgoing cash so you do not have to do it yourself. These software solutions can also provide helpful graphs and charts that make it easier to budget, gauge customer engagement, and more.
Since customers leave their details when they make digital payments online, they can help businesses with their marketing as companies can use these details to reach customers.
Adopting Hybrid Solutions
Hybrid payment solutions let businesses accept payments in cash but record the incoming money digitally. Many businesses use this approach to give their customers the convenience and benefits of paying with cash while using software to record sales and leverage the benefits of digital payments without accepting digital payments.
We see this with solutions that help members pay insurance premiums in-store using cash, where the store accepts cash but records the payments in software. You will also see this solution deployed in big stores accepting cash and digital payments.
A payment system comparison shows that digital payments are a much better solution for businesses as they are more convenient than cash payments, typically lead to customers spending more, and allow you to track sales and payments easily. However, many still prefer cash, so it is better to give your customers and business flexibility by accepting both.