Up for debate is whether we could one day become a cashless society that relies only on digital currency. But despite the advantages of e-cash, or electronic cash, we are not there yet in terms of mass adoption.
Many signs point in that direction, however, including the growing acceptance of e-cash as a payment form among businesses and individuals. This may leave you wondering if it’s time for your business to start accepting e-cash.
E-cash, or electronic cash, can take an online form to complete transactions or it can take the form of a digitally encoded card for offline payments. The use of digital wallets is also viewed as as an e-cash mechanism.
E-cash was developed to more easily conduct transactions on the Internet, letting consumers and businesses that may not have access to a debit or credit card participate in online transactions. It’s even been seen as helping certain types of freelancers who operate online, giving them a way to get paid easily for their work without having to deal with traditional payments that could take much longer to get to them. E-cash has been viewed as a way to truly globalize the economy, bringing together what has been building in terms of the global business environment.
Think of e-cash as combining the benefits of many other types of transactions. While similar to debit cards and credit cards, e-cash enables individuals to conduct transactions with each other. Although it is similar to personal checks, it is much more feasible for even the smallest of transactions.
So, does e-cash make sense for your small business? Before you decide to accept e-cash, consider the pros and cons of doing so.
Early adopters of e-cash have the advantage of winning over customers who will view the business as a cutting-edge company. This can be a real enhancement to the brand image you are working on building.
More customers will also be accessible through your ability to offer your goods or services in the global market when accepting e-cash. That’s because you are not restricted by local currencies but work within a digital realm of payments. It facilitates your ability to work with people anywhere and at any time.
It’s a simple process for payment that is easy for your business to use as well as for your customers. Keeping it simple means a better user experience for your customers, so they might feel more inclined to return, again and again, to your business. As these transactions also tend to be among the fastest way to receive your money, you will gain further efficiencies and increase your cash flow.
Another advantage: E-cash is considered a very low cost transaction, especially when compared to accepting credit cards. There are even payment processing companies that could help you process e-cash transactions, offering little to no costs to make the transaction.
In the world of payments where fees keep appearing, your ability to cut out this expense can mean increased profitability.
Fraud is the primary concern when it comes to e-cash, including those making counterfeit digital money that is difficult to distinguish from legitimate money. There are also many concerns among governments that criminals and terrorists are using this type of currency to fund their activities.
As of yet, no standard exists for the use and exchange of e-cash that is consistent around the world, leaving many to be suspicious of it. This also keeps the risk of accepting e-cash higher than other types of payment methods. Any type of hacking that results in the theft of e-cash could mean that the fiduciary responsibility may land on your shoulders, particularly if doing so has put you in a position of non-compliance where fees and penalties could also be added to that burden.
However, in addressing these “cons” related to e-cash, the good news is that online security is becoming more fortified in terms of multiple layers and tools, such as tokenization, encryption, and the use of biometrics.
If you do choose to start accepting e-cash in your business, it doesn’t mean you have to forego the other payment methods you are already using like debit and credit card acceptance. After all, it could be quite a while before any paper or plastic payment options completely disappear given consumer and business comfort levels with these long-used items for transactions.
Just think of it as a way to add more payment options to your business to speed payment and cash flow. If you are still thinking about it or have adopted this new payment method, be sure to continue reading up on the latest updates related to e-cash so you ensure you are on top of any regulatory and security issues. The more you know, the better decisions and faster actions you will be able to make.