The past year has changed the way businesses operate. In many areas, it’s very likely that those adjustments are permanent. Meanwhile, the long-term effects and benefits of some changes have yet to be fully understood. For example, the pros and cons of a cashless business.
The Shift Away from Cash
The debate over whether we should shift to a cashless society has been around for a while. But it took the pandemic for consumers and businesses alike to take the idea seriously. As fear began to grow over contracting the virus, more and more consumers gave up handling cash and grabbed for their cards and turned to their digital payment options.
Credit cards are more widespread than ever, and mobile wallets like Apple Pay are growing rapidly. Entire countries like Sweden are setting their eyes on a completely cashless society. This has many wondering if this movement will take off in the U.S. as well. And, if so, is it a good or bad thing for business owners?
Should Your Business Go Cashless?
Despite reports that cash use is declining in the U.S., 70% of consumers are still making purchases with it on a weekly basis, according to Pew Research Center. Some U.S. cities have already gone cashless, while others are passing legislation to prevent businesses from turning away cash.
Meanwhile, major companies like Amazon are providing options that allow consumers to avoid the checkout process altogether. Even credit card companies are jumping onboard. Visa launched a Cashless Challenge back in 2017 which awarded 50 businesses with $10,000 for making the switch.
Now, even small businesses stand to benefit from going cashless. Here are a few of the top advantages:
- Save Time, Money and Resources. Yes, businesses have to pay for each credit card transaction. But it also costs additional time to accept cash, count the cash at the end of the day and make frequent trips to the bank to make deposits (not to mention paying deposit fees.). Going cashless can potentially cut costs.
- Boost Checkout Efficiency. Cash means long lines, counting cash and making change. One swipe or tap of a credit card can significantly improve both speed and efficiency during the checkout process.
- Considerably Decreases Risk. Cash increases the risk for theft and robbery for a business. So much so that some businesses are going cashless to combat repeated, dangerous robbery attempts.
On the flip side, there are some cons to going cashless:
- You will have higher credit card fee costs.
- You might lose customers who still prefer to pay in cash.
- You will be in a tough situation if your system goes down and you have no way to accept payments.
The bottom line: you will have to look at your business’ unique situation. Another business may find that cashless works well for them, but that does not mean it will work for your business type and industry.
Are your competitors going cashless? What do your customers think about the possibility? What are the majority of the payment types you receive right now? Do you have a payment processing provider you can trust that offers excellent support? These are just a few of the questions you will need to ask to determine if going cashless is right for your business’ future.
Author Bio: Payment industry guru Taylor Cole is a passionate payments expert who understands the complex world of merchant service provider. He also writes non-fiction, on subjects ranging from personal finance to stocks to cryptopay. He enjoys eating pie with ice-cream on his backyard porch, as should all right-thinking people.