Cashless payments are becoming more and more popular in businesses all over the world. There are many benefits to using this type of payment system, including increased efficiency and security. In this guide, we will discuss the different types of cashless payment systems available and how to choose the right one for your business. We will also provide tips on how to implement a cashless payments system and how to get the most out of it.
What is a Cashless Payment?
As the name describes, cashless payment is a financial transaction that does not involve the exchange of physical currency. Instead, the funds are transferred electronically between two parties. There are many different types of cashless payments, but the most common are credit and debit card payments, mobile payments, and electronic fund transfers…so, let’s explore these in more detail.
Types of Cashless Payment
Credit/Debit Card Payments – Perhaps the most common type of cashless payment, credit and debit card payments are made using a plastic card that is linked to the customer’s bank account. The customer simply swipes or inserts their card into a card reader and enters their PIN to authorize the payment.
Mobile Payments – Mobile payments are made using a smartphone or other mobile device, and this method is growing exponentially each year. Customers can use their devices to pay in-store or online. Essentially, the customer’s device is linked to their bank account or credit/debit card, and they can make payments using apps such as Apple Pay, Google Pay, or Samsung Pay.
Electronic Fund Transfers – Thirdly, an electronic fund transfer (EFT) is when businesses send or receive payments electronically. This can be done using ACH transfers, wire transfers, or even PayPal. EFTs are fast, secure, and efficient – making them a popular choice for businesses of all sizes.
One of the benefits of choosing the third option is that you can integrate the machine into a much larger POS system. Suddenly, you’re taking payments, managing inventory, tracking sales, and more with the best EFTPOS machine around.
How Do Cashless Payments Work?
With no physical cash, you might wonder how cashless payments work. With a simple card transaction, the customer swipes or inserts their card into the machine. The machine reads the card and processes the payment through an encrypted system. This all happens in a matter of seconds, and the customer is on their way. Soon enough, the money will show up in your account, ready to be used.
These days, EMV chip cards are becoming more and more common. This stands for Europay, Mastercard, and Visa, and these cards have a small chip on them that helps to process the payment. The chip creates a unique code for each transaction, making it more difficult for fraudsters to clone cards and steal money.
While magnetic strips were great for a while, they’re not as secure as EMV chip cards. Unfortunately, this means that if you’re still using a magnetic strip reader, you may be held liable for any fraudulent charges made with a cloned card.
If you’re thinking about making the switch to EMV chip cards, you’ll need to invest in a new card reader. You may also need to train your employees on how to use the new reader, but the extra effort will be worth it for the increased security.
With this, you now know everything you need to know about cashless payments and how you can use them in your business!
