Small businesses are moving towards cashless payments. Juanny Romero, the chief executive of Mothership Coffee Roasters, added more digital payment options after noticing customers no longer using cash.
The pandemic resulted in a shift to cashless payments, causing a reluctance among small-business owners. But there are benefits: An owner said one cashless system saved her $3,000 a month.
For many small-business owners, a necessary shift towards digital payments is essential.
The percentage of Americans who say they are 'cashless' has skyrocketed in the last five years. Forty-one percent of Americans said they didn't use cash for their purchases in a typical week in 2022, up from 29 percent in 2018, according to a Pew Research Center survey released last October. Small-business owners are becoming more interested in cashless payment due to a variety of factors, such as rising consumer demand, faster checkout, lower labor costs, and increased security. Some analysts are warning that waiting too long can result in losing revenue, experts say. However, there are drawbacks to go cash-free, including a learning curve for entrepreneurs who may not understand how to set up digital payments, a lack of accessibility to credit cards for low-income consumers, and privacy concerns.
The advantages of immediate payment, increased sales and the ability to sell to customers who may use other currencies are among the benefits. ''It s worth it,'' said Kimberley A. Eddleston, professor of entrepreneurship at Northeastern University. Some business owners are afraid to move too quickly, worried that today's technology could become obsolete tomorrow. And there are compatibility and cost issues to consider, said Wayne Read, chief executive of Forged & Formed, an online jeweler with a physical store in Woodstock, Ill. In his jewelry sales, where items can be pricey, he said a speedy transaction might not be suitable. he said he wants people to feel they have rushed their decision. Although tech has improved, most Americans have less or no access to financial services like credit cards and mobile wallets, although that's slowly improving. In 2021, an estimated 5.9 million households did not have a bank account, down from 7.1 million households in 2019.
Cash is seen as a tool for consumers to keep track of their spending. The recent banking turmoil in the US has made many depositors question the security of financial institutions, resulting in the transition to the digital economy. Experts say cash is unlikely to go away. The Fed's survey shows that people in lower income households still rely on cash for payments. Despite the speed and efficiency of cashless payments, small-business owners say cash is still a viable option for their customers. Romero said the governor's decision was a major step in a long-standing dispute that he said had tarnished public relations.