We’ve all had that shock when we’ve gone into an independent coffee shop for our morning Americano, or out for a drink in a neighbourhood bar, and seen the “Cash only” sign above the register.
So your tap and go has gone out the window and your empty (physical) wallet demands that you run out to an ATM to withdraw the necessary cash. Or you keep on walking to a competitive business that accommodates your pay preference.
While you might admire the spirit of these independent businesses, you know in your heart that if they succeed it will be despite, not because of, their clinging to traditional payment methods.
They also hold an important lesson for businesses accepting payments in the legal cannabis industry. The payment landscape is shifting so quickly that it sometimes seems impossible to keep up to speed. But if you cling to tried-and-true methods of accepting payments, you may see your customers walking down the literal or digital street to a competitor.
So be aware of sticking to these seven traditional payment practices:
1. You Cling to the Belief that Cash Is King
Well, cash is still king, but its crown is beginning to tilt as other payment methods, especially digital ones, get traction. In 2017, of the 16.5 billion POS transactions in Canada (worth $868 billion), 6.5 billion of these were cash transactions.
However, a cash-only business loses out on the explosion of new payment methods radically changing the physical and online retail landscape, including mobile device payments and online options, such as PayPal, WeChat, Google Pay and Apple Pay.
Businesses that take cash only to avoid the tax burden also run the risk of arousing government interest and a painful audit. The use of paper cheques also remains strong, but business must cope with the headaches of dealing with insufficient funds and bank penalties.
2. You Cater to Only One Generation
Yes, baby boomers were once the most powerful economic force around. But if you ignore the needs of younger, rising generations, then your business will be doomed to a shrinking customer base and sales.
In its research, Visa tracked the payment usage preferences of “Millennials vs. Baby Boomers” and found that the younger generation was:
• 36% more likely to use smartphones as mobile payment devices
• 37% more willing to be tracked by trusted merchants
• 23% more interested in using wearables as payment devices
• 12% more likely to use digital currencies
In other words, the next generation of consumer is here and their preferences are going to drive the payments industry more and more.
3. You Send Out Paper Invoices
Doing traditional paper invoices is time-consuming, tedious, error prone and can lend itself to late payments, bad cash flow and difficult filing.
By contrast, digital invoicing allows you to streamline your payment processing, so you can send invoices electronically to your cannabis business customers. They can, in turn, pay with a few clicks. You can also set up electronic reminders to maintain a robust cash flow.
4. You Differentiate Between Your Online and Offline Retail Experiences
Yes, you may think of your physical and online retail presences as distinct shopping experiences. But your customers don’t see it that way. In fact, for them, the boundary between the digital and the physical world is blurring. They want to employ the same payment methods they enjoy online in physical stores.
Overall, they want their retail experiences across the board to be seamless and frictionless. They will gravitate to businesses that cater to their payment processes and don’t send them scrambling to find alternative methods.
5. Your Checkout Process Is Clumsy
Whether it’s a long lineup in a store during the holiday season or an online checkout process with too many steps—you run the risk of customers abandoning purchases before completion if you make things too difficult for them.
Stores, for example, are exploring options such as arming sales staff with digital tablets, so they can process orders and payments on the floor. And online checkout can be simplified by streamlining navigation, reducing the number of clicks to complete the transaction and offering as many payment options as possible.
6. You Limit Payment Methods
Yes, merchant credit card fees are an added business cost, and it’s hard to keep up with all the new payment methods like electronic fund transfers, digital wallets, tap-and-pay services, and process all major credit and debit cards. But if you limit the payment options you provide to your customers, you do so at your own peril.
If you offer customers a full range of options—with a payment system that is flexible enough to incorporate new payment technologies as they rise—then you will get their loyalty and repeat business.
7. You Take Compliance Issues for Granted
The bedrock of the new legal cannabis industry is that it stays compliant with government regulations designed to keep cannabis out of the wrong hands and to shut down the black market. To take a relaxed approach to remaining compliant is to risk penalties, sanctions and loss of licence.
Cannabis businesses need more than a payment gateway—they require a 360-degree compliance system that protects their operations with fully customizable controls.
With a Merrco Payments solution, you can turn out-of-date payment methods into best payment practices, making your cannabis business smarter, simpler, safer and more secure.