It’s a tough time to be a retailer – or any business that relies on hourly sales and service staff. Amid labor shortages, the U.S. retail sector lost 20,000 jobs in November 2021 alone, and the restaurant sector has struggled to return staffing back to pre-pandemic levels.
While minimum wage pay and negative customer interactions are driving workers out of these jobs, making the payment side of these roles more efficient could play a key role in helping retail and restaurants stay open and keep operating fully, allowing their existing staff to do more productive tasks.
Cashless payments and unattended or semi-unattended retail isn’t just a pandemic trend – COVID-19 just accelerated a shift that had begun worldwide within the last decade. In the future, cashless payments will become the primary method of business transactions and help revolutionize the way our workforce operates. Here are three reasons why cashless payments will continue to grow – and help businesses grow – in 2022:
Cashless payments will ease labor shortages
On average, a contactless payment from a credit card, mobile device or wearable takes just seconds to transact, while chip credit purchases take twice as long. Cash payments take even longer, with greater room for human error. Businesses can’t ignore that cashless transactions happen faster than other forms of payment, and there’s opportunity to better use the time and labor saved transacting payments by rerouting employees to more important tasks.
Cashless payment methods – for example, touchscreen order kiosks in quick service restaurants – decrease the need for one or multiple staff members to be tasked with monitoring cash registers, since no cash is changing hands. In restaurants, servers armed with hand-held cashless pay terminals can collect payments right at the table quickly, which means less time running back and forth to a kiosk and more time interacting with customers and making restaurant experiences memorable. In retail, this cashless pay experience can be replicated, eliminating the need for customers to queue for check out.
The time and efficiency added by each cashless transaction frees employees from manning registers and puts them back where they bring the most value to a business’s brand experience – out on the floor. For some businesses, this even could add up to requiring less employees per shift, decreasing the strain on the labor market.
Businesses can own and leverage cashless payment data
Did you know that the most downloaded mobile payment app in the U.S. in 2018 was the Starbucks consumer loyalty app? Since 2018, other businesses have followed Starbucks’ lead and today most major retail and restaurant businesses offer integrated mobile payment and loyalty apps. There’s a reason why Starbucks’ early adoption of this technology paid dividends for its brand.
Consumer data is an invaluable marketing resource to brands as marketing technologies become more nuanced and integrated across our screens. There are more ways than ever to reach consumers, but it’s harder than ever to make a message stick.
Starbucks succeeded by building its own platform for engaging with consumers and reducing friction in the consumer experience by speeding up transactions with mobile ordering and mobile pay. Through its cashless platform, Starbucks can take in data on the nature of each transaction and consumer behavior during purchases to inform future marketing opportunities – upsells, instant refunds, discounts, in-app games – that keep its customers coming back for more.
Early adoption benefits businesses
Starbucks was an early adopter of cashless technology years ago, and today businesses that stay at the forefront of the latest cashless innovations are more likely to have staying power with consumers. Not every alternative payment method (APM) will have the ubiquity that checks or credit cards once did, but getting in early creates more loyalty with savvy consumers.
In the next year, U.S. consumers will gain more familiarity with more diverse APMs, including payment QR codes, eWallets, cryptocurrency payment, prepaid credit, and buy now pay later (BNPL) ecommerce. These methods are already popular in other countries around the world but have yet to gain widespread adoption in the U.S.
Retailers should integrate various tools into their business to allow these different, more advanced payment types, ensuring their payment process is easy and convenient. Consumers will gravitate towards having the flexibility to pay with the method they most prefer – this gives retailers and operators more opportunities to close a sale and redirect their energy back to their staff and business.
While cashless transactions are where payments are headed in the future, businesses should be realistic and acknowledge that cash isn’t going away anytime soon and may never fully disappear. Cash is an essential tool for how certain demographics navigate the world: the unbanked, underbanked, children and the elderly all continue to use cash and it is essential that they have payment options that work for them. Future-ready businesses will cater to both cash and cashless needs and take advantage of technology, such as smart registers and cash accountability tools, that allows both options to coexist while keeping cash safe.