Cash-only businesses used to be all the rage – especially for small business owners. Indeed, a lot of people still operate on this basis. Contractors and many other business owners will still only accept cash as a form of payment. There are reasons behind this:
- Cash gives you instant access to money
- Cash bypasses issues relating to credit card fraud
- Cash is cheaper for you to handle/process
- Cash can deliver some tax benefits as well
When you look at this, you wonder why everyone doesn’t adopt the cash-only approach! However, more and more companies are moving away from only accepting cash for payments. Why is this the case, and why should you avoid being a cash-only business in 2021?
Some people hate paying via cash. In fact, many people never carry cash around anymore, so having to go and get some from an ATM is an inconvenience. If you only accept one type of payment, you’re going to alienate a huge proportion of consumers. But, in a world of contactless and mobile payments, being a cash-only business seems like a silly idea. You literally cut yourself off from so many potential customers, meaning you’ll never maximize your earnings.
More Affordable Processing
One of the main reasons small businesses adopt the cash-only approach is to save money. Processing payments and getting a POS can be extremely expensive, eating into your profits. Well, it used to be extremely expensive! In modern times, you have things like a virtual POS that costs far less than the traditional option. You can learn more about virtual POS options here, but the standout feature is that they are highly affordable and will help you save money. Therefore, you can accept card payments without incurring excessive fees. It directly tackles an issue with card payments, meaning you can’t use the costs as an excuse anymore!
The COVID Effect
In all honesty, we were moving closer towards a cashless society before the 2020 global pandemic. But, the introduction of COVID-19 to the world has supercharged the idea of not using cash. For months, many shops only accepted card payments, as cash was seen as unhygienic. Ironically, this virus made a lot of us stop and think about how disgusting cash actually is. You have no way of knowing who has touched your banknotes before you, or what germs are on them. In many ways, we were forced to experience a cashless society because of the pandemic. Now, the rules are relaxing in some places, but many consumers continue to pay via card or contactless. It’s simply more hygienic, and we have something called the COVID effect in play. The impact of the pandemic has changed buyer’s behavior, making cash an unpopular payment method.
Does this mean your business should become cashless? No, not necessarily! Generally speaking, the best approach is to accept a wide range of payments. If people want to pay via cash, let them. At the same time, allow card payments and contactless for those that pay these ways. It means you don’t alienate anyone, maximizing your profit potential.