Flowers and Buds – Garden Center Magazine

In Norway, the world leader in the abandonment of physical currency and coins, only around 3 or 4% of all transactions use banknotes and coins. While it may take a while for things to get to the point where the government, like that of Norway, requires banks to offer ‘cash services’, there is no doubt that the money liquid is fast becoming “the old school”.

Consumers and businesses are voluntarily turning to credit and debit card payments at a remarkable rate. In fact, these cash dispensing machines can be on time as studies show consumers are increasingly embracing technology for transactions and moving towards a cashless society.

But it’s not just consumers who are flocking to a cashless society; companies are too. Any garden center that ignores developments like EMV smart card technology, Apple’s mobile wallet, and other mobile payment vehicles can see their sales drop. It’s a similar story for any business that ignores electronic payments, cyber currencies, and other payment options and may face an impacted bottom line as well. Will your garden center be prepared for a cashless society?

An overview of cashless

There was a time when the credit card was the only non-cash alternative for most people. In fact, those with fond memories may remember a time when credit cards were only used for important, special, and emergency purchases. Today, consumers are moving away from paper money and comfortable with cashless payment methods for small, everyday purchases. And, boy, do these payment options exist. To consider:

Peer-to-peer payments. The use of person-to-person (P2P) payment apps has increased dramatically to send money to loved ones in need, reimburse neighbors for groceries, or send rent to landlords during the pandemic. P2P payments have become so popular that at least one P2P service provider, Venmo, has been forced to increase its sending limits for person-to-person payments by 40%.

App Cash, Developed by mobile payment company Square, Cash App allows users to send P2P payments, donate and even tip professionals. All that is needed is a phone number or email address to set up an account and link a debit or credit card before sending and requesting money anonymously (if desired). For an independent garden center, Cash App is a free point of sale (POS) solution that allows the operation to handle multiple types of transactions without having to wait for a bank to process or withdraw them. Of course, Cash App is not the only POS option.

Smart phones facilitate complete transactions and eliminate the need for cash or a physical card to interact with a point-of-sale terminal. Online payments are completely remote while proximity payments are used in both supervised and unattended businesses. Of course, most proximity payment methods are still backed by credit and debit cards, which are often stored in an electronic wallet.

Mobile wallets, or digital wallets, are smartphone applications for storing credit and debit card information and enabling so-called contactless transactions.

Apple Pay, designed for Apple device users, is one of the most popular mobile wallets. While debit card payments are free to the merchant, credit card transactions incur a 3% fee.

Google pay allows Android users to pay for their purchases using their phone anywhere that supports Near Field Communications (NFC). Users can also perform P2P transactions as well as pay for in-app and online purchases. Debit card payments are free, but credit payments currently incur a 2.9% fee.

Samsung Pay is the third major mobile wallet option. It works the same as Google and Apple Pay, but is intended for use by Samsung Galaxy owners. It can be used anywhere as it uses Magnetic Secure Transmission (MST) technology which enables payments anywhere traditional magnetic cards can be swiped.

Not surprisingly, the success of mobile wallets has encouraged others to enter the online payments market. PayPal, for example, has its own contactless payment app.

Pay Pal is particularly useful for P2P transfers. Since the money comes from an individual’s PayPal account or a linked bank account, there is no charge. However, if a linked debit card is used, a fee is charged. PayPal’s merchant fees have a base rate of 2.9% + 30 cents per transaction.

Venmo is one of the three most popular P2P payment platforms and was only recently opened for selective commercial use. Venmo is accepted almost everywhere that accepts PayPal, its parent company. Unfortunately, independent garden center retailers and other “merchants” must route Venmo payments through a third party for all business transactions. It charges the same merchant fees as its parent company – 2.9% + 30 cents per transaction.

PayPal, Venmo, Zelle, Cash App, Google Pay, and Facebook Pay are just a few of the many P2P payment options for contactless transactions.

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Zelle is another payment app to transfer money to someone using their email or phone number. Zelle has moved from a consumer-only service to a B2B and P2P mobile payment application. Garden center operations with a checking account or small business savings account can start using Zelle immediately, as many large banks have integrated Zelle into their mobile banking apps.

Pay on Facebook, available only on Facebook, Facebook Messenger and Instagram, allows users to send and receive money through the Messenger app. Compared to a larger payment processor such as PayPal, this is best suited for small online businesses without an official storefront that relies on one-on-one contact with buyers via social media or occasionally sells in person (at farmers’ markets and local stores). arts and crafts fairs, for example).

Square’s Cash app, as mentioned, is just one of the many products and services that Square offers. A garden center can use Square accept mobile credit card payments from their customers and create a seamless sales process wherever you are. Square’s standard processing fee is 2.6% + 10 cents for contactless payments, swipe or insert chip cards, and swipe magnetic stripe cards. Manually entered payments have a fee of 3.5% + 15 cents. Square’s other services include Square Register and Square Point Of Sale.

NOTE: Of course, these merchant fees are likely to increase, or may have already been.

Crypto-currencies, such as Bitcoin and Ethereum, are an increasingly used tool for money transfers. There are, however, regulatory risks and hurdles that make them impractical for most day-to-day transactions.

Commercial electronic payments

Many independent garden center retailers in the United States are familiar with the Electronic Federal Tax Payment System (EFTPS) for making tax payments to the IRS. Few people, however, know that all federal benefit payments must now be paid electronically.

However, taxes and the payment of government benefits are not the only possibilities for electronic payments. The movement towards cashless has created a number of alternative forms of payment, including:

    • Electronic check conversions, which allow businesses to access customer check payments faster
    • Electronic payments, which completely ignore checks by allowing funds to be exchanged via paperless methods
    • Wire transfers, unlike direct deposits, are not free. While direct deposits are most often used for recurring payments, wire transfers are only used occasionally.

Electronic Funds Transfer (EFT), or direct deposit, is the electronic transfer of a payment from a customer to the garden center checking account – or vice versa – used daily by governments and businesses to transfer millions of dollars. dollars.

Automated Clearing House (ACH) payments transfer money from the customer’s bank account to the merchant’s account electronically. Direct deposits are made through the ACH system. Most of the major accounting software platforms currently offer an option that allows small business owners to activate the ACH bill payment feature.

Best of all, there are no processing fees for ACH payments, making it a cost effective tool for many independent garden centers.

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The unbanked

While cashless payment may be inevitable for a garden center business while appearing to be a “win-win” situation, this is only true if the operation – or the consumer – is financially secure. There are definitely downsides, especially for small businesses, start-ups, and certain segments of the population.

Described as “unbanked,” many individuals and businesses lack access to affordable banking services, relying instead on check cashing services and payday loans. In other words, although there may be a cashless society in the future, today there are many who are unable to make digital payments because they have no money. bank account, credit or debit card or smartphone.

A future without cash

The widespread use of credit and debit cards and the recent explosion in digital payment options have given the average person little reason to touch cash. The launch of innovative cashless (and cashierless) stores, such as Amazon Go, may make it seem like we are someday moving towards a truly cashless society.

Switching to cashless would obviously move us towards a more efficient, more practical and even more hygienic society. Today’s consumers are comfortable with cashless payment methods for small, everyday purchases.

Along with the convenience offered by a cashless society, however, comes a growing awareness of security concerns with all types of digital payments.

Love it or hate it, cash is playing a less and less important role in society. Unfortunately, the declining use of coins and currency can come at the expense of many, both individuals and businesses. Will your garden center continue to benefit from this new cashless society?

The author is a Pennsylvania-based financial writer.

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