Have you ever walked into a coffee shop or even a bar hoping to get a drink, to then discover that it’s “cash only?” Besides the fact that you no longer carry cash, you also can’t get that drink you’ve been wanting. Not only are you let down, but now you have to go the extra mile to find the nearest ATM. As you search for the nearest ATM you wonder why this particular establishment is cash only. You start to weigh all the pros and cons, just like that business owner did, as you withdraw money. At this point, you can only think of one or two reasons why this business only takes cash. However, after you read this you will have a better understanding of all the pros and cons of running a cashless business and the reasons why that establishment decided not to opt with a point of sale system or use credit card processing systems. Before we break down the advantages and disadvantages of running a cashless business, here is a brief history lesson when credit cards began to take over.
Those that are younger than 70 years of age, definitely won’t remember a world without credit cards. Credit cards were first implemented in 1950 and they have become a vital part of society. If you can’t picture what life was like in 1950, here’s a better idea. Back then the average price for a new house was only $8,450 compared to $388,000 now, the price of gas was only $0.18 and believe it or not milk was delivered to your doorstep every morning. We have come a long way! In those days cash was king, and in many regards it still is. However, credit and debit cards may soon take over the throne. To back up that claim, here are reasons why plastic will eventually replace cash.
What if I told you that one in four people carry cash on them, or that there are 123.5 billion non-cash payments made every year. Carrying cash has become an inconvenience, and the use of debit and credit cards will eliminate the bulky wallets, enhance the customer experience, and promote more spending. However, there are some drawbacks to going cashless. Businesses that go cashless will exclude potential customers, businesses will have to deal with more transaction fees, and consumers will become more skeptical of their privacy. Ultimately, going cashless comes at a price.
Determining what is right for your business and your customers are the key to running a successful business. Considering going cash only or using a point of sale system is not an easy decision. But you can check out this infographic created by Fundera for a more in-depth summary of what you should consider if you do decide to take the cashless route.
Thanks to Fundera for this graphic.