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Cash is the primary form of payment after we stop selling goods and services to others. However, digital currencies have taken hold in countries such as Sweden as the main means of payment for goods and services. As a business owner, you may consider going cashless, continuing to accept cash, or adopting a hybrid solution. See our payment system comparison.
Cash Vs. Digital Payments: A Comparison
Cash payments are easy to understand because a business involves providing physical cash for a product or service. These types of payments are easy for everyone as there is no technology or payment providers involved and no fees incurred by either party to facilitate them.
Digital payments are made using digital or online options and do not involve money transfer. These payments are called electronic payments or e-payments and can be made at the point of sale, online or through mobile devices and through debit, credit, prepaid cards and mobile/online wallets.
Considering digital and cash payments for businesses
In our payment system comparison, both payment options have their pros and cons. Cash is not as vulnerable to security breaches as digital payments because there is no system to breach. However, physical money can be stolen, although if this happens there is no risk that sensitive details will be stolen.
Digital payments are the most convenient option for many people. Customers can pay using any of your systems without having to visit an ATM or carry them with them. It is also much easier for people to pay digitally than cash and leads to higher purchase volume; Handing over physical money is often more difficult than handing over a piece of plastic.
Digital payments are easier to track than cash payments. Many systems even calculate your business income and expenses so you don’t have to do it yourself. These software solutions can provide helpful graphs and charts that simplify budgeting, customer engagement, and more.
As customers leave their details when making digital payments online, companies can use these details to reach customers and help businesses in their marketing.
Accepting mixed solutions
Hybrid payment solutions allow businesses to accept payments in cash but record the money received digitally. Many businesses use this approach to offer the convenience and benefits of paying customers in cash while using software to record sales and use digital payments without accepting digital payments.
We see this with solutions that help members pay insurance premiums using cash in-store, where the store accepts cash but records the payment in software. You will also see this solution accepting cash and digital payments in large stores.
A comparison of payment systems shows that digital payments are the best solution for businesses because they are more convenient than cash payments, allow customers to spend more, and allow for easier tracking of sales and payments. However, many still prefer cash, so it’s better to give your customers and your business flexibility by accepting both.
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