Saxon Wright, founder of Pablo & Rusty's Coffee Roasters, hasn't accepted cash at his cafe for over a year. Credit:Luis Enrique Ascui Wright anticipates most customers will pay using their card or phone but Pablo & Rusty's will also offer the option of payment using Frank Green smart cups which contain a chip linked to your credit card. "It's about trying to make it as frictionless as possible, making your daily activity as streamlined as possible," Wright says. He admits some customers may go elsewhere if they can't pay using cash. "There are always people that are not ready for change, there is always resistance," he says. "We are making an educated risk assessment."

Saxon Wright is set to open a cash-free cafe in Brisbane. Credit:Luis Enrique Ascui But Wright says the benefits for his business, which employs 40 staff and turns over $10 million a year, outweigh the disadvantages. "It changes the way we can interact with customers as we are no longer bound by them having to walk up to a certain point to order," he says. "As an owner and operator of stores it enables us to give our staff a better way of running a cafe at the end of the day." Square Australia managing director Ben Pfisterer says increased competition in the payments space is a good thing. Credit:Jesse Marlow Wright is looking forward to no till errors, no adding errors and no need to cash off at the end of the day.

"A lot of cafes like cash if they are not declaring their full income and paying staff off the books but we declare everything so why not turn that into an advantage?," he says. "We won't get 100 per cent adoption upfront but for us it is a statement about who we are as a business and what our values are. We value digital." Incumbents innovate We won't get 100 per cent adoption upfront but for us it is a statement about who we are as a business and what our values are. Saxon Wright The digital payment options for small businesses are increasing with the launch of Square in Australia alongside innovations by Australian payments businesses and the major banks. Pablo & Rusty's cashless cafe is using the Commonwealth Bank's Kounta on Albert payment system which enables businesses to use a single device to both take payments and access front-end point of sale and back-end processing systems.

Claire Roberts, executive general manager of local business banking at Commonwealth Bank describes the system as "a world first". "It really takes two devices, your traditional payment and point of sale devices, and creates one device and more importantly a mobile device so you can get to work queue busting," she says. Roberts says the future of payments for small business involves apps on payment devices and increased use of the data available through payment systems. "Albert was always designed to be extended and have its functionality extended," she says. "The key things for small and medium-size businesses is footprint agility so the insights that Albert provides can tell them where there might be markets or opportunities to do a pop-up store or more distribution ability." Here come the disruptors

The major shakeup in the payment space for small business is the launch of Square in Australia this month. Square is Twitter founder Jack Dorsey's other venture and is driven by the Square Reader, a three-centimetre square piece of plastic that plugs into any smartphone or tablet and turns it into a credit card processor.



Dorsey, who started Square in 2009, wants to make the payment space "magical". Square country manager Ben Pfisterer is equally enthusiastic. "We absolutely think it's exciting", he says. "What we think is exciting is the power and data you can get from sales," he says. "Over time you can analyse the data and measure how staff and products are performing." Pfisterer says the influx of new entrants to the market is "a great thing" and will spur innovation.

"One thing we are seeing is an absolute simplification of the transaction process," he says. Looking beyond the cashless store, Pfisterer predicts in the future there will be instant check in when you walk into a store. "It could be as simple as proximity when you walk into a store or more extreme solutions like facial recognition and technology that could be looked at," he says. Jost Stollmann, co-founder and chief executive of Australian mobile payments operator Tyro, is unperturbed by Square's launch in Australia.

"We consider our competitors to be the major banks who dominate the market," he says. Stollmann says Square provides a low-cost entry for merchants who take occasional card payments while Tyro targets small and medium businesses which are fast growing and process a significant amount of card transactions. Square's offering also fails to provide a tap and go option. Stollmann claims Tyro has lead the way in innovation in the payments space. "The first thing we did was we eliminated the outages which the major banks left the community with regularly, the second thing we did was we eliminated the risk that pin or card credentials could be compromised," he says. "We keep the consumer and the retailer safe."