Cash Only May Not Be the Best Decision for Your Business, and Here’s Why
The modern payment environment is continually evolving and smart entrepreneurs and business owners would be wise to stay on top of these changing trends. Customers are continually seeking new payment methods, including EMV credit cards and digital wallets. Because of this, retail businesses that continue to hold on to the cash only ways of the past are likely to get left behind in favor of their competitors who are more willing to embrace the ongoing changes in the industry.
The Death of Cash
Although it is true that many customers do still carry cash, the number is dwindling. Part of the reason for this is the cost of obtaining cash. Between travel expenses to get to ATMs and the fees often involved in using them, the costs of carrying cash are culminating in making it not worth the effort. With fewer customers using cash to begin with, your business is greatly limiting its potential client base by only accepting cash and eschewing other forms of payment.
The Rise of Credit Cards and Digital Wallets
Credit cards and digital wallets provided unmatched ease and convenience for customers wishing to make purchases quickly. In addition, credit card payments often offer customers rewards, like points or cash back. These rewards offer customers an additional incentive to use this type of payment method. Furthermore, the majority of businesses these days do accept credit cards, so you’ll be missing out on a large number of potential customers who will simply choose your competitors.
Taking into Account the Wishes of Your Customers
With the growing popularity of alternative payment methods over cash, your business should make every effort to accept these payments at your POS terminals. If your business attempts to operate as cash only, many of your customers will have to leave to use an ATM. Even if you provide at ATM in your store, they may not wish to pay the added fees for using an ATM outside of their bank’s network.
Avoid Loss of Revenue
Aside from losing customers who do not carry cash and do not wish to visit an ATM, your business also runs the risk of losing out on additional revenue. Typically, people only like to use cash for small transactions so that they don’t have to carry too much of it at once. Most customers prefer to use credit cards or digital wallets for larger transactions. Because of this, your customers are more likely to refrain from making larger purchases at your shop, which can greatly cut into your revenues.
The Solution to the Problem
In order to maintain success as a cash only business, your organization will need to have an extremely loyal client base that would be reluctant to take their business elsewhere. The only other alternative would be to offer a product or service that your customers simply would not be able to obtain anywhere else. In today’s world, this is extremely unlikely, as customers have so many options when choosing where to shop.
The only way to get around this problem is to allow your business to evolve with the changing times and begin to accept the payment methods that your customers are demanding. The shift away from cash is not likely to change any time soon, and you don’t want your business to fall by the wayside in favor of your competitors. Make the switch to accepting credit cards, debit cards and digital wallets to avoid losing customers and hurting your business’s bottom line.