Cash use has steadily been declining in recent years as new technology like contactless and mobile payments make it easier than ever to get by without physical money. The COVID-19 pandemic saw a lot of businesses move to a completely cash-free model and it looks likely that many will stick to the new way of doing things in the future. But is this really a good idea?
People always talk about the benefits of going cashless, like faster payments and saving time on cash handling. However, there are a lot of downsides you should consider before deciding to do away with cash altogether. These are some of the reasons why businesses shouldn’t go cashless.
You Alienate Certain Customers
The younger generation are good with technology and have no problem using contactless cards and mobile payments. They manage their budget by tracking their spending on a mobile banking app, but that’s not the way that the older generation do things. Many older people don’t like using new technology and they prefer to take out cash so they can monitor their spending. Some people might not have a bank account at all or they may be paid in cash. If you switch to a completely cash-free model at your business, you alienate these customers and you could lose a lot of sales.
You’re Reliant On Credit Card Systems
Technology is great when it works, but what happens when it goes down? If you only accept card payments and your system breaks, you can’t make any sales until it’s back online again, which is a serious problem. But if you take cash, you can continue operating while things get fixed. If you install a cash machine and use a good ATM service and repair support company, you can ensure that your customers always have access to cash to spend at your business. This means you can avoid expensive downtime and prevent any frustration from customers.
You Pay More Credit Card Fees
The fees on credit card transactions can be as much as 3 or 4 percent and, over time, this cost quickly adds up. A lot of businesses struggle with this, which is why many small companies only accept cash and some places will charge you an added fee for credit card payments. However, charging a fee to the customer can annoy a lot of people and it doesn’t usually cover the full cost anyway. So, your business is still losing a lot of money through credit card fees. If you decide to go cashless and force everybody to make card payments instead, that loss will only increase. If you are looking for ways to save your business money, encouraging more cash payments is one of the best things you can do.
There are a lot of benefits to offering a wide range of payment options and taking card payments does make things easier for a lot of customers. However, there are still a lot of people out there that like using cash and it does have its benefits. So, now may not be the right time to go completely cashless.
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