Did your business suffer revenue loss amid acute currency shortages in India? The demonetisation of Rs.500/1000 currencies has put many businesses on the back foot.
The smart thinkers, on the other hand, saw the bright side of it and went “cashless” to tide over the currency crunch as well as attract more customers. Some of e-payment companies witnessed an overwhelming 1000 percent spike in money being added to e-wallets and nearly 400 percent increase in transaction value of their offline payments.
Some e-payment companies have even taken proactive steps to introduce ‘Express Activation’ that allows merchants to get their account approved and activated within an hour of submitting the required documents. Earlier, the same process used to take up two to three days. Moreover, these companies have been assessing online traffic volume and velocity, and their impact on the infrastructure along with the security implications.
The demonetisation move, that apparently crippled the economy, is actually working as a catalyst to digitize the payment system. Online retailers and other associated businesses can benefit immensely as there is a huge potential of exponential growth.
Amid the surge of digitized payment methods, it is worthwhile to say that be it credit/debit cards, mobile payments, or cryptocurrencies, have their own advantages. However, from the consumer perspective, the mode of payment like cashless COD proves to be truly convenient. Now, before we delve further into the crux of cashless COD and its benefits, let’s take a look at some hidden cost factors of using currencies.
Cash Has Hidden Costs
Yes, it’s true; cash has hidden costs.
Surprising as it may sound, but the truth is using cash involves numerous social costs to individuals, businesses and the government.
Cash has been around for so long and has always been the primary mode of transactions due to certain advantages it entails. Some of the benefits are — it does not require any specific software or hardware, and is safe from hackers. These are the reasons why use of currency never got dated. However, with the increasing reach of the banking sector to a larger consumer base, cashless transactions are likely to mobilize economy at a faster pace along with providing instant purchasing capacity.
Coming back to the hidden costs, for individuals, using cash imposes a regressive tax; especially the impact is the highest on the unbanked. The unbanked pay much higher fees to access their money than those with bank accounts. Businesses, on the other hand, face an uphill task of managing paper currency as those need to be stored, secured, and accounted. That’s not all; retail businesses also lose a substantial amount of revenues every year due to cash shrinkage such as internal theft and robbery.
In a country like India, there is an overwhelming dependence on cash and significantly low penetration of alternative payment systems. A McKinsey report shows that in India nearly 60 percent adults don’t have access to the banking system, and they are highly dependent on cash. So, for large-scale digitization of the payment system, access to banking and use of debit/cards needs to be increased. As long as cash is the primary mode of transactions, the lion’s share of the hidden costs would be borne by average people because of the lost tax revenues emanated from under reported earnings and transactions.
Cashless COD can accentuate the Digital Journey
Introduction of Cashless COD makes retail transactions easier both for customers and online retailers. Just by swiping a debit or credit card customers can instantly make payment for their online purchase.
If you are an eTailer, the key benefits you receive are below:
• Cashless COD helps you receive payments faster
• Reduces days sales outstanding or DSO
• Gets you funds faster by having end to end payments electronically
Cashless COD Integration by Smartbox
Smartbox provides for cashless COD through the card swipe facility at all of its automated parcel delivery terminals where online shoppers can take advantage of secure self-service payment by using any major credit or debit card. To make payments consumers just need to dip their card and enter the one-time password (OTP). It is as easy as using an ATM machine. This eliminates the hassles of arranging exact amount of cash for COD or waiting to get back the balance. Online shoppers can select any of the locker terminals and collect their parcels by swiping a card to make payments on the spot. To learn more about Smartbox automated parcel lockers, you can check https://smartbox.in/.