Credit card usage has been on the rise for the past several years all over the world. On the other hand, cash is declining but there are still over 70 percent of Americans that buy in cash. So, should your business consider going cashless or not?
Pros of a Cashless Business
Before you go cashless, consider the benefits of doing so for your small business.
Save time and money
While businesses have to pay a fee for each credit card transaction, they also have to pay an employee for the additional time it takes to accept cash. From counting the cash at the end of the day to making frequent trips to the bank and possibly paying deposit fees, these extra hours add up.
Increase efficiency at checkout
Counting cash and change is much more time consuming than swiping or tapping a credit card. For businesses that experience long lines during peak times, going cash-free can significantly speed up the checkout process and curb those lines, making customers more likely to stop in and make a purchase.
Imagine not having to go through your books to figure out why the register is short at the end of the day. By going cashless you are able to track every transaction easily and lead to more accurate accounting, which increases efficiency and your bottom line.
Cons of a Cashless Business
Pay more fees
Credit cards come with fees as high as 3 or 4 percent on each purchase. Business owners spend a small fortune on credit transactions each year. This fee is why independent businesses are still cash-only or charge customers a fee for credit card use. Other businesses are forced to build the credit card fees into their prices which means that you can lose some customers.
You can lose customers
Depending on the type of business you have, you might turn customers away by going cashless. People might feel alienated which can result in negative publicity for your business. Customers who prefer to pay in cash will be forced to go somewhere else. Consider if you want that to happen to your business before jumping into a cashless business.
Cannot accept payments if system crashes
Having a credit card system go down is stressful, even with the course of accepting only cash until it is back up. If your business goes cashless, you will be rendered unable to accept any form of payment in these situations.
You Can Use Both for Your Business
It can be hard going cashless when many consumers still prefer or relies on cash. Consider accepting both but try to encourage customers to pay with a card if they can. Perhaps in the future all businesses will be completely cashless but until then embrace both options so that your customers can be happy.