Research Finds Many Consumers Still Prefer to Use Cash
Consumers and business owners
alike get excited when new technology pops up and improvements are made to
payment options. Who doesn’t love having options?In support of this, research
has found that not everyone is as excited about cashless stores as was initially
thought.
Cashless stores debuted so far
have actually received some pushback in certain cities, the state of New Jersey
and by a member of Congress. There are concerns that cashless stores will leave
cash-dependent consumers unable to shop in such stores – not everyone prefers
card or mobile-payments-only options.
New research from the Federal
Reserve Bank of Atlanta supports this; the research found that cashless stores could
very well impose a burden on consumers who do not have a credit or debit card.
In addition, some consumers that have the option of buying prepaid cards still
prefer cash, according to a working paper by Atlanta Fed researcher Oz Shy.
“Among consumers who do not have
credit or debit cards, 86.4% prefer paying with cash,” Shy tells Digital
Transactions News by email. “This is what economists call ‘revealed
preference.’ That is, these consumers have an option to purchase prepaid cards,
but they show us—reveal—that they prefer cash.”
Shy went on the explain, “A
complete transition to cashless stores would be extremely difficult in any
country (if not impossible) particularly because cash use at the point of sale
remains strong in most countries.”
The Pros and Cons of Cashless
Business
Why would a business consider
cash-only in the first place? Here are a few of the reasons why businesses go
cashless:
·
Lower Risk – Money in the bank is always
safer than “under the mattress”. Going cashless significantly reduces the risk
of theft. Having large quantities of cash on hand seriously increases the risk
of being robbed.
·
Efficiency Increases–Digital systems today
are well-developed, reducing the time it takes to process transactions. This is
a huge bonus for volume-based businesses that need to process large numbers of
transactions each day.
·
Taxes are Simpler – Digital tracking
systems also automate your tax process, making the process of capturing and
categorizing yearly information effortless.
How to Keep All Your Customers
Happy
Today, it is more important than
ever before to stay up-to-date with the latest demands and preferences of your
customers. Consumers are very in tune with the latest tech trends. To ensure
you keep your customers happy, their information safe and your business on the
path for growth, it is critical that you offer as many payment options as
possible – this might also mean offering cash as a payment method.
If your business needs to secure
or revamp its payment processing options, consider working with an alternative
provider like First American Merchant. Our experts have years of experience in
working with all different business types and industries and have tailored
services to meet each of their unique needs. Secure quick merchant funding to grow your
business or multiple payment processing options for your customers. Don’t let
the lack of payment options make you lose potential loyal customers.