Cash is king, right? For the increasing number of businesses that are going cashless, the answer appears to be “no”. More businesses are choosing to no longer accept cash payments at the point-of-sale. Debit and credit cards only.
Why are businesses choosing to no longer accept cash? Some say that with every cash transaction, payment processing slows down significantly. Others say cash is too risky; it has to be secured, counted and deposited. Cash is an easy target for theft, from those walking in from the street or from dishonest employees. In addition, merchants are often required to pay fees for cash deposits and for handling coin. Armored services for pick-up also cost the business money.
Merchants are now weighing the advantages and disadvantages of both options: cash and cashless. Each time a customer uses their credit card, the issuing bank withholds a transaction amount. On the other hand, customers spend more for certain purchases (especially dining and take-out) when they use their card.
Fraud can also be an issue with accepting card payments, but point-of-sale fraud is much less after the U.S. adoption of the EMV chip. Data collected by Visa revealed counterfeit fraud dropped by 70 percent between December 2015 and September 2017.
The biggest concern for merchants is whether they will alienate customers by saying no to cash. However, this has not stopped giants like Starbucks and Amazon from experimenting with cashless stores. Has your business tossed around the idea of what it would mean to go cashless, and how it would affect the bottom line?
How to Now When to Make the Transition
The biggest challenge is not necessarily the transition itself, but determining when and how.Consider the following tips:
- Assess your current customers’ use of cash versus card payments, tracking the volume and value of transactions over a 30-day period.
- Search for patterns in cash payments. Are there customer groups that use cash exclusively? Do cash transactions spike at certain times throughout the day?
- Just ask. Talk to you customers and ask why they use cash for payments, and whether they would be against your business going cashless.
Do you need a merchant account to accept your customers’ debt and credit card transactions? If it has been hard to find payment processing services, know that you are not the only one. Many businesses struggle to find merchant services because their business type or industry is considered “high risk”. Consider contacting a high-risk specialist and ask them about their high- risk credit card processing. Help your business make the transition to cashless as smooth and secure as possible.
Author Bio:Electronic payments expert Blair Thomas co-founded eMerchantBroker, serving both traditional and high-risk merchants with services like high risk credit card processing. His passions include producing music and traveling.