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The Impact of Digital Payments on Retailers
Cashless transactions have gained enough momentum in the retail space to pose a serious threat to the future of cash-based payments. The convenience of paperless payments benefit both the retailer and the buyer. In addition, digital payments are more secure and easier to track.

The Impact of Digital Payments on Retailers

Large retailers have no choice but to accept digital transactions in order to remain competitive. However, many small retailers who rely on cash payments are being forced to redesign their entire payment process to accommodate digital payments.

A retailer looking to introduce digital payments must consider all the popular modes of payment the buyer is likely to use, and be prepared for it.

Hardware and gadgets

The very first problem with digital payment methods is ensuring that all the necessary hardware is available to facilitate transactions. For card-based payments, card readers accepting all card types must be used. Many retailers use technology like Square, that allows you to accept card transactions via the mobile device.

In the case of mobile transactions, some small retailers accept e-transfers, while others support services like Apple Pay and Google Pay through the tap function on card readers.

Transaction fees

Another thing small traders and cashless buyers need to consider is the transaction costs of digital payment. Like any other business, digital payment platforms aim to make money, and some do this by charging a small percentage fee or commission on some if not all of the transactions.

The cost per transaction is small, but for retailers dealing with small-scale buyers, it can constitute a large sum. Mobile money transfers have some of the highest transaction charges. To stay competitive, mobile service providers have had to create entirely different payment platforms with trade-friendly charges for retailers.

In most cases, the retailer has no control over which party should bear the transaction charges. Some services charge the buyer, but most will force the retailer to pay a fee. Transaction charges are understandably a major problem for small digital transactions.

Record keeping

It’s much easier to keep payment records if all transactions are made digitally. When it comes to digital payments, small retailers such as supermarkets and convenience stores have to reconfigure their record-keeping systems to account for digital payments alongside cash transactions. Different cashless payment methods have different modes of reporting and transaction processes. All of these have to be harmonized collectively for record keeping.


Delays and system glitches have become a problem, as many payment types depend on a number of pieces of technology to be able to process transactions. Every piece of new technology in its rollout phase can cause unforeseen problems.

Busy retailers with high customer traffic have had to devise ways of dealing with delays and system failures. Some have gone as far as to offer kiosks for cashless payers only. At times, seemingly more efficient payment methods can end up taking longer and causing headaches for both retailer and customer.

Cashless transactions are steadily phasing out cash payments in nearly every business sector. For small retailers, it may result in drastic adjustments in business procedures to reap the benefits of digital payments.

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Chris is OPIN's resident marketing scientist. Obsessed with testing and tweaking, he is constantly uncovering new patterns. His obsession with testing helps the agency gain insights for internal marketing campaigns and client projects. His unconventional methods help our readers look at business and marketing concepts in new ways.