Why accepting cash at the online checkout is a good idea for merchants

Chirag Patel
12 December, 22

As consumer demand for online cash payments increases, merchants stand to gain a significant competitive advantage by accepting eCash at the online checkout.

While debit cards and credit cards continue to be the most popular way to pay for goods and services online, consumer preferences are changing.

Our latest Lost in Transaction research (surveying 11,000 consumers in 10 countries across the Americas and Europe) shows that 47% would prefer to use eCash for online payments – in other words, they would like to pay cash for eCommerce and other financial transactions online.

The fact that 44% of respondents told us they’d buy online more often if eCash payments were an option suggests that merchants who don’t currently accept online cash payments are actively losing sales today and missing out on the opportunity for potential future revenues. 

So what’s driving consumer demand for eCash payments? And how do merchants stand to gain by adding it to their online payment mix?

Consumers are looking for more control

Our research suggests that the increasing importance of online security in eCommerce transactions and a desire for more control over spending drive consumers’ demand for eCash,  

Consumers have become more risk-averse and budget-conscious as a result of record levels of online fraud and the cost-of-living crisis.

70% of respondents worry about sharing financial details online and would prefer not to do so. And 44% would choose the payment method they felt best protects them from the risk of fraud, if given a choice.

To make better use of their shrinking budgets, 44% of our respondents have changed their online payment habits and lending products are falling out of favour with the notable exception of credit cards. 40% have shifted towards payment methods that enable them to track their spending more accurately.

When a customer chooses eCash at the checkout, they’re given a unique barcode they can scan at one million points of sale in 55+ countries to complete the purchase. Financial details don’t have to be shared, which guarantees the transaction is secure, private and ultimately safer.

Similarly to consumers using cash for better budgeting when paying in store, our research suggests they are using eCash as a budgeting tool for online expenses. A recent survey of UK ATM users, for instance, found that 39.2% are using cash to control their spending, while 26% of those who have changed their online payment habits to better control their spending are paying with eCash more often.

From consumer advantages to merchant benefits

On the flip side of consumers wanting to pay online with eCash, there’s an equally compelling case for merchants to accept it.

To begin with, offering eCash at the checkout creates more payment choice. And, in a landscape where customers are ready and willing to walk away from online transactions when their preferred payment method isn’t available, this can really make a difference.

But eCash also has three other significant benefits for merchants.

First, cybercriminals can’t get their hands on sensitive data because the transaction is settled in person and no financial details are shared online.  That allows merchants to boost trust by offering consumers a secure and private payment option, without introducing needless friction into the process.

Second, eCash can be a fallback if consumers run into payment issues online. One in ten online card payments get declined. So, offering eCash as an alternative can have a positive impact on the volume of abandoned transactions.

Thirdly, eCash can enable merchants to reach more potential customers.

According to a 2021 Morning Consult survey, 34% of Americans are either unbanked or underbanked, and, as a result, rely on cash to make payments. Similarly, in the UK, 5 million people are dependent on cash, either because they’re unbanked, they’re on a low income, or they receive part of their salaries in cash.

Adding eCash to the checkout can open the door for these un(der)banked communities to start participating in the online economy and shop online without the need for a debit card, a credit card, or a digital wallet that’s connected to a card or bank account.

Apart from being a revenue opportunity, this also has implications for financial inclusion. The more prevalent eCommerce becomes, the greater the risk that those who rely on cash will be left behind, unable to access basic goods and service. This is a particularly compelling argument when considering that retail sales worldwide are expected to increase from 20% in 2021 — including sales of essentials like groceries — to closer to 25%  by 2025

eCash payments are critical to the future of eCommerce

Cash is more than just a convenient means of payment. It’s a guarantee of privacy and anonymity, a way to control spending, and a fail-safe when technology lets us down. And, for many in difficult circumstances, it’s a lifeline they depend on through their most challenging times.

With more commerce moving online, it’s no surprise that there is an increased demand for online cash solutions that serve the same purposes. And with cybercriminals getting more sophisticated and the dire economic outlook, it’s reasonable to expect consumers will want to take steps to be safer and stay on budget.

The good news is that, if you’re a merchant, eCash payments have big benefits to you too.

Adding it to your online checkout is relatively simple and will increase trust, lower your risk, and give customers’ lifetime value a healthy boost.

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