Have you ever walked into a mom and pop store hoping to get a fresh cup of coffee or even a breakfast sandwich but realized that they only accept cash? Instead of just effortlessly swiping your card, you now have to find the nearest ATM to withdraw money just so you can purchase the quick breakfast you’ve been craving all morning. As your withdrawing money, you start to wonder why this particular store is cash only. In the meantime, you also start to weigh all the pros and cons of running a cash-only business in your head as you punch in your pin number. After reading this, the next time you see a “cash only” sign hanging in the window you will have a better idea why that business owner decided to revert to cash instead of cashless or vice versa. However, before we break down the six advantages and disadvantages that these business owners carefully considered, here is a brief history lesson of cashless businesses.
For those that are younger than 70 years of age, it is likely that you don’t know a world without credit cards. Credit cards were implemented in 1950 and they have become a vital part of our society today. If you have no idea what happened in 1950, here is your brief history lesson. In 1950 the average cost of a new house was only $8,450 compared to $388,000 in 2019, the price of gas was only $0.18 while the national average is currently $2.59, and believe it or not, your morning milk was being delivered to your doorstep. We truly have come a long way! In 1950 cash was king, but plastic will soon take over the throne. To back up that claim here are reasons why credit cards will replace cash.
What if I told you that only one in four people carry cash on them, or that there are 123.5 billion non-cash payments every year. Going cashless will allow businesses and consumers to become more efficient, less worry of theft, and ultimately more spending. However, there are drawbacks as well. Going cashless will exclude potential customers, businesses will have more transaction fees, and people will become more skeptical of their privacy.
Determining what is right for your business and your consumers is key to being successful. Check out this infographic created by Fundera for a more in-depth summary of what you should consider if you do decide to operate cash or cashless business.