Cash-dependent businesses on the brink of collapse: Agusto alerts
In today’s digital world, where online payments and e-commerce platforms are becoming increasingly popular, cash-dependent businesses are under severe threat. Agusto, a leading credit rating agency in Nigeria, has raised an alert about the imminent collapse of such businesses if urgent measures are not taken.
Cash-dependent businesses, which rely heavily on physical currency for transactions, have been hit hard by the rapid digitalization of financial services. With the COVID-19 pandemic further accelerating the shift towards digital payments, these businesses face significant challenges in adapting to the new normal.
One of the major issues faced by cash-dependent businesses is the decline in customer footfall. As people increasingly choose the convenience and safety of online shopping, physical stores are witnessing a sharp decline in customers. This directly impacts the cash flow of these businesses, as they rely on daily transactions to sustain their operations.
Furthermore, the cost of handling cash has been a significant burden on cash-dependent businesses. From counting, storing, and transporting cash to ensuring security, there are numerous associated costs that can be avoided with digital payments. This puts cash-dependent businesses at a competitive disadvantage compared to their digital counterparts.
Agusto’s warning comes at a time when several businesses are already struggling to stay afloat due to the economic impact of the pandemic. Cash-dependent industries such as retail, hospitality, and small-scale businesses have been hit the hardest. Without immediate action, many of these businesses may not survive the ongoing crisis.
To prevent a complete collapse, Agusto suggests that cash-dependent businesses should urgently embrace digital payment solutions. This will not only enable them to adapt to changing consumer behavior but also reduce operational costs, improve efficiency, and provide a safer shopping experience for customers.
The Central Bank of Nigeria has made efforts towards promoting digital payments, with initiatives such as the Cashless Policy and the introduction of mobile money services. However, there is still a need for increased awareness and adoption among businesses and consumers.
Government intervention and support will also play a vital role in helping cash-dependent businesses transition to digital platforms. This can include providing training and incentives, ensuring reliable internet connectivity, and implementing policies that create an enabling environment for digital payments.
It is clear that the future of commerce lies in digital transactions, and businesses that fail to adapt will be left behind. By embracing digital payments, cash-dependent businesses can not only survive the current crisis but also thrive in the long run. The shift towards a cashless society is inevitable, and it is crucial for businesses to take proactive steps to secure their future.