The utilization of card terminals for cashless payments in retail, gastronomy, and hospitality presents diverse opportunities and possibilities. In spring 2019, 300 small and medium-sized enterprises from these sectors were surveyed to identify the advantages of card payments and contactless transactions for their businesses. Additionally, 1,000 consumers participated in the survey, expressing their preferred payment methods as customers. The findings were summarized in the study conducted by ECC Köln in collaboration with Concardis, titled "Better Cashless than Cashless - Potentials of Digital Payment Methods in SMEs". The results clearly indicate a direction: the trend is shifting towards cashless payments. Here, we present the advantages and outline both currently favored payment methods and new potentials for small and medium-sized enterprises in Germany.
Benefits for Merchants:
Increase in Revenue: Small and medium-sized enterprises achieve higher revenue through card payments.
Customer-Centric Approach: Half of the customers in Germany prefer to pay exclusively cashless. Mobile payment is becoming increasingly popular.
Streamlined Accounting: Merchants save costs and time by accepting card payments.
Increased Revenue through Cashless Payments
Cashless payment methods offer significant potential for increased revenue in retail, restaurants, and hotels. More than half of the respondents (53%) report a positive impact on revenue, with 51% noting an increase in new customer acquisition.
53% of small and medium-sized enterprises are convinced that offering cashless payment methods has a positive impact on revenue..
43 % of the surveyed restaurateurs and hoteliers reported noticing an increase in the average transaction amount through cashless payments. These positive effects are particularly evident in stationary retail. 43% of the surveyed entrepreneurs observe a rise in the average basket size due to cashless payments. For instance, one entrepreneur stated that offering cashless methods resulted in approximately 25% higher revenue for their business.
The higher the purchase price, the more likely it is to be paid with a card
Customer preference is evident: the higher the amount to be paid, the more inclined customers are to use cards. At the Point of Sale (PoS), the location of the sale in your business, an overwhelming majority of 76% of customers prefer to pay cashlessly for amounts exceeding €50. For amounts under €50, there is still room for improvement, although the trend towards cashless payments is already increasing. In Germany, card payments now surpass cash payments more than ever before. Every second German (49%) believes they will pay cashlessly more frequently in the future. Smart Consumers, particularly tech-savvy individuals who always carry their smartphones, prefer cashless payments by 70%. Therefore, businesses relying solely on cash risk losing easily attainable revenue from higher purchase amounts.
Customers pay closer attention to prices when cash payment is the only option
Every second German (49%) becomes more price-sensitive when cash is the only accepted payment method. Among Smart Consumers, 69% pay particular attention to the price of a product or service when cash is the sole payment option. Without the option of card payment, customers tend to spend only as much as they have in their wallets for smaller and medium-sized amounts. In industries with naturally higher transaction amounts, customers even insist on cashless payment methods. For instance, in the hotel industry, cashless payment with credit cards has become established. In the German retail sector and restaurants, the acceptance of debit cards (Girocard) ranks second.
Contactless payment is becoming increasingly popular
Contactless payment has become mainstream: 30% of all customers already regularly use contactless payment. However, there is still general skepticism about the security of contactless payment. Pioneers in contactless and mobile payment are the Smart Consumers. More than two-thirds of this group (70%) prefer to use cashless payment methods, and 41% already utilize NFC chips. Within this customer segment, mobile payment via smartphone using Google Pay and Apple Pay is relatively more widespread. We anticipate that the trend towards mobile payment will continue to grow with greater awareness.
Faster Payment Processing at the Checkout with Contactless Payment
Every second merchant (52%) confirms quicker checkout processing with contactless payment. Customers share the same view: every second Smart Consumer (50%) believes that contactless payment is faster, simpler, and more convenient than conventional card payment (with a PIN). This customer segment tends to opt for contactless payment even for smaller amounts. Moreover, 57% of all surveyed consumers agree that convenient and fast payment options will become even more important in the future. The potentials are evident: with the deployment of modern card terminals, checkout processes in your business are significantly accelerated.
Contactless payment is becoming increasingly popular
Many entrepreneurs are not aware: cash is costly and involves extra effort. With cashless payments, you can not only increase revenue, but also save significantly on costs. Cash entails the effort of always having the right change, making regular cash deposits and withdrawals, and vulnerability to errors in counting.
The time required for cash processing in administration is 45% higher than for cashless payment methods.
Consider that you save time and personnel resources by transitioning to digital payments in your business. Administrative tasks and management can be significantly reduced in this way. Merchants report a time saving of 45% for each checkout, reducing the average time from 29 to just 20 minutes. Moreover, there are also risks associated with transporting money to the bank. By digitizing your payment processes, you ensure a significant streamlining in your back office.
Customers prefer to pay cashless
For German customers, the availability of cashless payment methods is already considered essential in both the hotel industry and retail, with 52% even expressing a particular preference for it. It is regarded as practical and convenient, eliminating the need to search for an ATM. Furthermore, cashless payment is seen as more hygienic and contemporary. Only 37% of consumers are not bothered if a business does not accept card payments. For about one-third of all customers, a wide selection of payment methods is important. By accepting cards and offering cashless payment options, you can align with customer preferences, resulting in happier customers, larger purchase baskets, fewer abandoned purchases, and consequently, increased revenue.
Customers expect their preferred payment methods
90% of medium-sized businesses have adopted card acceptance for one simple reason: they have responded to the demands of their customers. The majority of customers expect to find their preferred payment method available. Overall, German customers are open to fast and forward-thinking payment options: 57% of the general population and 74% of Smart Consumers believe that innovative payment methods will become even more important in the future. Only 37% do not feel bothered if their preferred payment method is missing. In particular, hotels are avoided if they only accept cash. Nowadays, it is commonplace for 69% in retail, 53% in restaurants, and 84% of the total German consumer population to pay cashlessly. With the ongoing digitization, it is expected that other industries will follow suit.
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