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Open to new ideas: Cashless payments boost sales
Executive Education / 17 February 2020
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Programme Manager
Annette Blank's main focus is on the practical design of banking topics for different target groups and their implementation in appropriate forms of learning and training units, such as certificate courses, seminars or blended learning concepts.

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In shops and stores everywhere, digital payment is regarded as the latest thing. Cash was the standard way of paying until, in 2018, the balance tilted – for the first time, more shoppers were paying by card than with cash. Helped, no doubt, by the development of near-field communication (NFC) technology, which has accelerated the whole payment process – benefiting customers and businesses alike.

The advantages of cashless payment

When you no longer have to count in money and count out change, queues at cash desks start to shorten. As does the amount of money held in cash registers, making them less attractive to thieves. What’s more, the need for armoured security vans – with all the associated risks – rapidly declines. A cashless payment study by Concardis GmbH highlighted another interesting little fact: Customer who use cashless payment methods buy more. They’re more flexible and tend to worry less about budgeting. While their wallets only hold any cash they happen to have withdrawn from their current account, a card puts the full account at their disposal. Figures show that receipts paid for by card are generally higher than receipts paid for by price-sensitive cash buyers. And finally, shops that don’t offer cashless payment systems tend to irritate shoppers, resulting in lower sales.

Digital payment

In Germany, digital payment hasn’t quite made the grade. While many Germans do pay by card and are familiar with NFC, mobile payments in general haven’t yet earned sufficient trust from consumers. Smartphone-based payment methods are described as a “value-added service” – while they support a seamless shopping experience, they still aren’t well-established. They are, however, gaining ground – especially among smart consumers, an increasingly enthusiastic target segment. A typical smart consumer is educated, usually younger, and lives a mobile, smartphone-friendly lifestyle. In a sign of things to come, members of this target market always carry one or more mobile devices. Two thirds of “smart consumers” already use cashless, digital payment options.

The epitome of mobile payment: Alipay

So what mobile payment channels currently dominate the market? Pioneers include Google Pay, Apple Pay, PayPal Mobile Payment and Payback Pay – as well as Chinese platform Alipay. What started as a digital wallet has blossomed into a complete digital ecosystem – Alipay no longer just offers digital payment options, it now provides a comprehensive range of services, allowing users to book taxis, arrange travel, manage their retail discounts and much more. You can read a more detailed blog post on Alipay here.

Would you like to find out more about digital payment? Frankfurt School’s Certified Payment Professional certification course has a whole module dedicated to “Cards, mobile payments & trends”. Please visit our website for further details.

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