The risk of robbery is pushing some companies to drop cash payments, but it might be tough for small businesses to make the switch to credit.
Put your money where your mouth is, but make sure it’s not cash.
As technology makes credit card payment processing simpler, companies should consider ditching cash and becoming credit-only businesses, according to The Wall Street Journal. While a number of factors are involved in the decision, the main concern is the risk of robbery.
The success stories are beginning to pop up, including a cafe in Baltimore and an eatery located in the Northeast and California. Both businesses cited decreasing the risk of robbery as the main factor for the switch. Neither store’s sales have gone down since refusing to accept cash.
New technology that simplifies credit card transactions is making the shift away from cash possible, The Wall Street Journal reported. Square and Intuit GoPayment, for example, have credit card readers that plug into smartphones and tablets. That means more businesses can avoid the high cost of traditional point-of-sale systems and accept payment on the go. Apple Pay, Samsung Pay, and Google Wallet only require customers to tap their phones on a reader to make payments.
This technology has led to a shift toward a cashless economy. In 2016, the value of credit card transactions exceeded cash transactions globally—a feat that the United States achieved in 2004, The Wall Street Journal reported. Countries like China, Denmark, Sweden, and South Korea are also at the forefront of this trend.
All that being said, it isn’t always easy for small businesses to go cashless. Many businesses don’t accept credit cards to avoid the cost of credit card transaction fees, which are typically 1% to 3% of a purchase. Refusing to accept cash may confuse or alienate customers who are accustomed to shelling out bills, resulting in lost business.
If you’re a cash-only small business, it’s important to know how to keep your company safe—especially since the government is often suspicious of cash-only operations, said Bradford Cohen, a Florida-based criminal defense attorney. Cohen spoke to NFIB about how cash-only small businesses can avoid trouble.