By Carson O'Connell, PR and marketing director at Zodaka.
In the not too distant future, cold hard cash will likely be obsolete, and the cannabis industry needs to be ready to adapt. Here are six reasons cannabis businesses should stop procrastinating and join the cashless revolution now:
1. Cash is a thing of the past. While cash is still considered an essential payment method, 58 percent of respondents to a May 2018 Bank of America survey said they think it is inevitable they will live within a cashless society in their lifetime -- and 18 percent thought paper currency will disappear within five years. That vision is supported by the growing percentage of cashless transactions. Twenty percent of the US population will make at least one mobile payment this year, and nearly 20 percent said they could go a full year without using cash at all. Soon, ATMs in dispensaries will go the way of the dinosaurs.
2. Cashless payment is secure. The digital transfer and storage of funds is safer than ever. This is particularly relevant to the cannabis industry where traditional financial institutions are often not willing or legally able to handle or store cash generated by cannabis businesses. Rather than worrying about the safety and security concerns (let alone additional costs) associated with having to store thousands of dollars of cash on the premises of a cannabis dispensary, dispensaries (and other cannabis businesses) should use a cannabis-friendly cashless payment application, such as Zodaka, to conduct their business.
3. Cashless payment is convenient. Don’t have exact change? No problem. Can’t break a $100 bill? Not an issue. In need of that extra $1.50, but no bank or ATM in easy reach? Don’t stress it. Cashless payment allows consumers to always be able to pay for their goods or services in full and in the exact amount, preventing some of the more frustrating customer experiences and all those unused jars of loose change from sitting around the house. But cashless payment isn’t just more convenient for customers, it is also more convenient for businesses. No more wasted time manually counting coins. No more worrying about employee theft. No more runs to the bank to make deposits. And particularly relevant for cannabis businesses, no more filling online pre-orders that are never picked up and paid for.
4. Cashless payment = increased revenue. According to the US Bank Cash Behavior Survey, 76 percent of people carry $50 or less in cash. If you are a cannabis business only accepting cash payments, that puts a very low ceiling on how much any given customer can spend on any given transaction and dramatically reduces the potential revenue that could be generated from those same customers. In addition, research suggests that customers who use a cashless payment method to pay for goods spend more per sale than customers who use cash -- in some cases up to 52 percent more (page 6).
5. The cannabis industry is still young and malleable. Because the cannabis industry is still relatively young, industry best practices and norms are still being formed. If cannabis businesses move to cashless payment systems as the preferred payment method now, it will help normalize cashless payment within the industry as it continues to grow. But it isn’t only about payment. The cannabis industry of the future will be notable for its embracement of technology. The rise of cashless payment will come with the greater modernization of the cannabis industry. Payment is just one part, but hopefully a catalyst.
6. The cannabis industry is attracting top talent. As the cannabis industry continues boom it is attracting more and more top talent and young entrepreneurs who have the skills and expertise to drive innovation forward across the industry, including cashless payment solutions. Businesses should focus on investing in these new and innovative technologies and ride the growing wave of going cashless.
Cannabis businesses that do not modernize and choose to stick with aging payment methods will be phased out as the industry consolidates and becomes more sleek and corporate. Right now, a lot of people still consider the cannabis industry to be an underdog industry with some potential, but immense shifts are coming that will leave it unrecognizable and rife with opportunity. And we hope to be at the forefront.
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