The cashless era is gathering momentum at a rapid pace throughout the United Kingdom and Europe as a whole. The benefits of the transition to digital payments can create sweeping benefits for fintech innovation and for point-of-sale (POS) transactions. 

According to a recent European Central Bank study, the dominance of cash has fallen to 52% , representing a drop of 7% from its 2022 figures. In terms of payment value, card payments are already more prevalent than cash, with a 45% share of payment volume allocated to cards as opposed to 39% for cash. 

While these trends highlight the popularity of cashless payments, mobile wallets are set to accelerate the age of cashless. While the share of mobile apps as POS payments is still low at 7%, this figure is nearly double the 4% recorded just two years ago, and we can be confident that it will continue to grow faster than its counterparts in the future. 

The transition to a cashless society will have significant implications for businesses and POS technology alike. Opening the door to fresh innovations and more frictionless payment solutions, let’s take a deeper look into what the cashless boom means for the future of payments: 

Opportunities for Busiensses

For businesses, the shift to cashless payments holds a great number of opportunities. From streamlining the transaction process to mitigating the risks associated with handling cash such as the danger of fraud, theft, or human error in accounting. 

According to a study by Dun & Bradstreet, consumers even spend up to 18% more compared to when they’re paying using cash. The reason for this is that cash can limit the spending power of consumers, whereas cashless purchases are limited only by the account holder’s balance or access to credit. 

Crucially for businesses, cashless transactions can also provide more actionable data insights into customer behaviour, helping to supercharge marketing strategies and tailor services to better suit the specific wants and needs of customers. 

Embracing the AI Boom

One of the biggest drivers of the cashless revolution at the point-of-sale will be artificial intelligence. 

Thanks to AI-powered POS software, businesses will be capable of analysing unprecedented volumes of transaction data to predict customer behaviour, suggest the most appealing product recommendations, and manage inventory levels more effectively. 

Embedding AI into the POS experience empowers more businesses to not only build their operational efficiency but also level up customer satisfaction rates by offering a more personalised shopping experience. 

As a prospective use case, artificial intelligence embedded in the POS experience can help deliver more streamlined checkout processes with the help of predictive analytics. These can anticipate the individual needs of the customer and reduce prospective bottlenecks during peak times. 

With the added help of chatbots and virtual assistants, troubleshooting at the point-of-sale can also be far more responsive and effective in enhancing the shopping journey of the customer. 

The Age of the Portable Business

In-store purchases no longer require a brick-and-mortar location, and a growing number of UK businesses are opting to operate on a more flexible and mobile basis. 

According to a recent BT survey, around 73% of entrepreneurs running a business or side hustle believe they couldn’t do so without reliable broadband and mobile connectivity. 

The ability to build a portable business has been the cornerstone of food trucks and pop-up retailers for years, but now, the emergence of handheld POS technology has paved the way for unprecedented levels of flexibility when it comes to accepting payments. 

With contactless, chip and pin, and a variety of other digital payment options, handheld POS terminals have become core components of many portable businesses. Capabilities such as the taking of tips and splitting the bill can make the innovation ideal for temporary food halls and restaurants, while fast receipt printing means that services on the go can also flourish. 

Handheld POS technology can also offer visibility on stock availability, along with intuitive reporting capabilities, paving the way for comprehensive levels of management even if you’re far away from your warehouse. 

The Role of QR Codes

Although quick response code, or QR code, payments haven’t become prevalent in the UK, their usage has been rapidly increasing throughout Asian nations like China, India, South Korea, and Indonesia, and they could represent a future frontier for businesses expanding their payment capabilities. 

To make a payment via a QR code, you simply need to scan the code presented by the merchant with your smartphone camera. Then, you confirm the amount you want to pay and submit. 

Juniper Research suggests that 30% of all mobile users will use QR codes by 2025, while as many as 1.5 billion people used QR codes to make a payment in 2020 during the emergence of the pandemic. 

QR codes are a strong and secure alternative to cash transfers that can help businesses to accept payments from anywhere without the need for payment hardware. Merely setting up the code is enough to direct customers to a web payment form. As a result, QR codes may become more prevalent in the future, particularly for small businesses. 

Life in a Cashless Society

Although cash will still play a secondary role in the future of payments, the emergence of a cashless society can provide businesses with countless opportunities to deliver a more seamless and flexible experience for customers. 

The ability to adapt your POS to match a variety of payment preferences and use data analytics to improve the quality of your operations will be key to your long-term sustainability while boosting long-term profitability. It’s for this reason that it’s worth looking into the ways cashless solutions can take your business to new heights today.