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.