Why should small businesses adopt digital payments and drop the cash?small businesses, digital payments, cash

Why should small businesses adopt digital payments and drop the cash?

By  Hana Ihjoul , Digital Marketing.

There are several factors to consider when choosing payment methods for your small business; including average transaction time, and the cost of cash versus cashless alternatives. According to the global research and consulting firm IHL Group, the average cost of accepting cash payments is a whopping 9.1% of the total transaction.   


During COVID pandemic and the quarantine restrictions, the local and global market both observed that 95% of customers preferred to pay by credit/debit card over cash. According to Zawya, digital payment in Saudi Arabia currently represents 36% off which the majority (30%) is through credit cards. 


The global and local market also witnessed a clear growth in terms of online payment, according to an Ernst & Young report, 69% of financial leaders in the Middle East either transferred or plan to transfer their payments to adopt electronic solutions.  


The average cost of cash transactions  

Many retailers prefer to deal with cash transactions only as they have many concerns about high fees and costly contracts dictated by POS terminals and their providers. However, the costs of cash-only transactions range between 4-15% in the retail sectors, making digital payment methods in fact less expensive to merchants. 


ِHowever retailers still try to avoid digital payment methods in order to avoid the direct charges involved in transacting digitally. Merchants often fail to account for other costs associated with cash transactions such as the cash register and safe, the amount spent to deliver the orders, the losses incurred when customers fail to accept orders, the time and cost of daily deposit movements in addition to the tedious audits required for cash transactions and employee payouts. 


In addition to the extensive costs of cash transactions, the pandemic has made customers and business owners alike prefer precautionary measures in order to reduce risks of infection that comes with cash and credit transactions, making it harder to ignore the rapid growth of cashless payments. 




Payment Gateway such The PayLink 

The average cost per transaction 

9.1% of the total cash received 

2.95% per transaction or 1 AED per transaction 





Transaction time: Cash Vs. Credit Card transactions    


On average, it takes about two seconds to process a credit card transaction, which speeds up the process for the customer and the retailer. In addition, the fact that customers can pay remotely on e-payment gateways makes receiving payments from regional or international customers easier and faster, hence providing a wider customer base for the reseller. 


During the Corona pandemic, PointCheckout developed a solution that allows companies to receive payments from customers via the internet without the high cost of POS devices, with the launch of The PayLink app; a mobile application that enables merchants to manage e-payments through sending payment links and accepting online payment. For example, a person in Abu Dhabi can pay for a product in Dubai and have it delivered as a gift without the hassle of cash on delivery or relying on other ways to transfer the amount to the reseller. Resellers can also receive money from their customers without the need to create a website that supports online payments or wait for bank transfers.

Last Updated  January 13, 2021