The Central Bank of Nigeria recently disclosed in a document that cash-based transactions would reduce by 2025. According to the Payments System Vision 2025 agenda, the goal is to have a cashless and efficient electronic payment system infrastructure that would facilitate financial services in all the sectors of the economy.
“As we implement the PSV 2025 agenda, the CBN will continue to ensure that the Nigerian payments system is widely utilised domestically, supports government’s financial inclusion objectives, and meets international standards while contributing to overall national economic growth and development of Nigeria,” the bank said.
Without a doubt, the popularity of physical money is declining, and cashless forms of payment, such as credit cards, mobile wallets, direct debit bank transfers, mobile apps, cryptocurrencies, gift cards, and vouchers are becoming more popular.
While you may not be interested in going fully cashless in your business, it is important to make sure you have multiple payment options for your customers. Hence, if your business’ payment options are limited, you could be chasing away customers.
Cashless transactions are extremely beneficial to both businesses and customers and here is why:
1. Saves Time and Effort:
It could be time-consuming and expensive transporting cash to deposit at the bank frequently especially if you receive a high volume of cash. Frequent bank trips can shift your focus away from other demanding tasks, and going the cashless route means you’d be freeing up time to attend to other important tasks.
You will also be saving yourself the stress of dealing with long bank queues and generally make your days more productive.
Although going to the bank to deposit or withdraw cash might not seem necessarily daunting, implementing cashless payments would open your eyes to see the benefits that you’re missing out on.
2. Promotes Transparency and Documentation
Introducing cashless transactions sets a business up for transparency in its dealings because it is easy to prove that a purchase was made, check the amount paid at a glance, the time of payment and the parties involved.
Armed with a database of such information will allow you to keep track of peak transaction times as well as trends in the buying and spending habits of your customers. Provided that transactions are documented, analyses can be done to determine and develop more efficient business strategies.
3. Mitigates Risks
Contrary to some arguments, working with cash poses a major risk most times. From fake currencies to burglaries, the drawbacks of offline payments evidently outweigh the disadvantages of e-payments. Whether on-premises thefts or by employees, the risk associated with keeping large sums is reduced in cashless transactions as payments go directly to the company’s account.
4. Simplifies bookkeeping.
Payment methods do not only determine ease of transactions, they affect other areas of a business such as accounting and bookkeeping. Often times, accounting is a major challenge for small businesses that only accept cash or checks. Having to count cash manually while reconciling accounts at the end of every business day could be frustrating. This approach is not only prone to human errors but makes it even more difficult to record accurate information.
Once an entrepreneur leverages a cashless payment system, cashflow can be easily monitored in a centralized place. If all transactions are automatically recorded, payments would be accurately accounted for from customers to suppliers and staff also.
5. Customer satisfaction and credibility
Considering the highly competitive markets that businesses operate in, it is crucial to be flexible when relating with customers. If you notice that some of your customers prefer a certain payment method to another, then go ahead to include it so that buying from you is effortless. You should not lose money and potential customers because you are not embracing different payment methods. The popularity of online shopping is skyrocketing, so small business owners who want to still maintain cash-only payment will be doing themselves and their business a disservice.
Furthermore, accepting card payments, transfers and other online transactions changes how a small business is perceived. Generally, such businesses appear more professional and credible to prospective customers who would be more confident when buying from you.
6. Improves sales figures
Cashless transactions allow entrepreneurs to boost sales within a short period of time. Cash-based transactions involve a long process of receiving the cash down to recording payments. The entire process is bulky in itself. Cashless transactions allows you to do more with less time and resources, thus cutting down operations cost and improving your figures overall.
The Bottom Line…
It is wise to make available a payment format that your customers are familiar with, and this should include cashless payment options. With the recent statement from the Central Bank of Nigeria, it will become a reality sooner than later, and those businesses that have already adopted it ahead of the time will be the better for it.
