Over the past several years, we’ve seen a number of innovations regarding how we pay for goods. Last year, tech giants Apple launched its Apple Pay service, which allows users to make payments by scanning their smartphone or smartwatch across the terminal. We also saw the launch of Bitcoin, an open-source, online payment system that allows users to transact directly with each other without the need of any kind of intermediary.
The Most Popular Choice
Let’s face it, the days of paying in cash are dwindling. The idea of a cashless society has become a question of when it will happen rather than if could it happen. Sweden already leads the race thanks to their widespread adoption of virtual payment devices.The latest figures from the UK Card Association found that annual debit card spending grew by 7.7% while credit card spending increased by 5.6%. The number of purchases made via card is up from 975m in February 2014 to 1,053m in February 2015. They also found that contactless payments, which previously accounted for 4% of total purchases the previous month was now up to 4.6%. As consumers preference for payment methods continues to shift over to cashless options, shoppers will expect even small businesses to keep up.
Better for Businesses
However, satisfying their customers isn’t the only reason businesses should make the switch. In fact, buying by card is known to encourage spending amongst shoppers, particularly impulse purchases.Research into the psychology of impulse purchases found that emotions and feelings played a larger role in the decision to buy, rather than the more analytical side of our brain. Without the tangible feeling of counting out the cash needed for the transaction, buyers are actually much more open to taking a chance on new items they wouldn’t normally be interested in.
This doesn’t mean that only small items are effected by card-based spending though. Because credit cards allow people to pay for items slowly over an extended period of time, they also facilitate the purchase of larger, more expensive items that shoppers may not have the cash in hand for. This allows individuals to spread their payments across several months and, for some, allows them to manage their cash flow more effectively.Another big incentive to card users is the way some banks offer rewards, such as cash back or points towards other purchases.
Reaching the widest possible audience is key to acquiring new customers. Keeping up with the latest in payment technologies, is just one of the ways you can successfully do this. Ultimately, whether or not a customer decides to pay with cash or card, they will appreciate the flexibility that having multiple options affords them.