Could your small business go day to day without accepting cash?
That’s the question a new group of payments experts are asking, and it’s being borne out in a few trailblazing businesses in North America. Cash represents a significant majority of the transaction volume for businesses worldwide. However, business planning and payments processing firms are also looking at the costs of cash handling and their wider economic effects, as well as the potential customer and workflow benefits of embracing cashless models.
Recent research by the Bank of Canada suggests that the use of cash is falling among Canadians to around 44% of transactions, representing 24% of the value of those transactions. Many consumers are opting for cards and contactless or digital wallet payments over cash for the sake of convenience, but what are the benefits of going cashless on the business side?
Some reasons for switching a business to a cashless model hinge on security and accountability. Not having cash stored in tills and other locations limits the potentially damaging risk of theft, and the inherent data logging and archiving of card-based or digital payments could reduce the likelihood of internal fraud or errors stemming from inaccurate record-keeping.
Other incentives that small businesses might consider about the decision to go cashless revolve around that all-important metric, efficiency. Small business owners often have to wear numerous hats to get everything done. The list of these operational tasks can eat up significant amounts of time that might be better served making your business better in more direct ways. Cashless payments have been cited as a way to save the time you would otherwise spend managing, transferring and counting money from tills. Eliminating cash could also speed up the time it takes for each customer to get the service they need, improving transactions per hour and limiting time-consuming service bottlenecks without having to add more tills and cashiers.
In proprietary research, Mastercard correlated a growing acceptance of cashless transactions with growth in “… affordable and broadly available financial products, a vibrant and competitive merchant marketplace, [and] a transparent and productive business environment.” These are all powerful indicators of a healthy small business ecosystem: correlations like these show that a move away from the traditional cash system is not likely to create negative consequences for the financial health and cash flow over time of a small business.
It may seem like a significant mental leap, and no one wants to turn away a customer with a billfold in hand, but it may be time to ask yourself what going cashless could change for your business. What’s your take? Would you make the switch, or is the value of cash in hand central to the success of your business?