A boom in local payment methods over the past decade has led to much talk of a cashless future, but digital businesses that avoid cash are missing out on a massive market opportunity.
According to the World Cash Report by G4S, cash remains the most widely used payment method on every continent, and the amount of cash in circulation is growing. Digital businesses are innovating ways of accepting cash payments and they’re growing revenue and market share as a result.
Here’s a look at how two technology companies are fueling their global growth with cash.
Uber hails new customers with cash strategy
Uber introduced cash options in Asia, Africa and South America starting in 2015 and saw exponential growth in those markets. According to Uber, experiments have shown an increased adoption rate of new passengers outside of core service areas by an average of 45%. In India alone, more than 65% of Uber rides are now paid for with cash.
Uber’s success has led other gig economy apps to explore cash as a way to expand their customer base, serve unbanked populations and successfully enter new markets.
Amazon partners with brick-and-mortars
In Mexico, less than half the population has a bank account. In 2019 Amazon began accepting cash at nearly 18,000 locations across the country through Mexico’s leading convenience store chain, Oxxo. Under the service, called Amazon Cash, shoppers can deposit between 100 and 5,000 pesos ($5 and $260) at Oxxo convenience stores. This provides customers with an Amazon account they can use to make purchases from the online retailer.
The partnership is a central part of Amazon’s plan to increase its reach in Mexico. Giving consumers who do not have access to bank accounts or credit cards the ability to make purchases online allows Amazon to compete against regional rivals like MercadoLibre.
Even the developed world demands cash
In North America, cash is still the preferred payment method for purchases under $25 and nearly 80% of all POS transactions across the Eurozone are made with cash. In New York City, a law was recently passed banning cashless-only payments at restaurants and retailers. The takeaway is clear, marketplaces, gig economy apps and merchants can reach new customers worldwide by accepting cash payments.
Make cash your advantage
In a world where cell phone adoption will likely surpass bank account adoption by 2021, accepting cash payments is a necessity for businesses with global aspirations. Uber and Amazon are just two examples of how digital businesses accept cash. Some of the most innovative companies are not only giving customers a way to use cash. They are also using their digital platforms to provide consumers with additional financial services they otherwise couldn’t access. Embracing the global cash economy isn’t a step backward, it’s a way forward for billions of consumers worldwide.
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