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Cash vs. Cards: A One-Sided Payment War


Back in July, Visa announced a challenge incentivizing independent restaurants to go cashless. For business owners, the announcement is one of many recent developments adding to why the cashless trend shouldn’t be ignored. Today’s consumers are using cash less frequently than ever, increasingly opting for their payment cards or mobile wallets to make purchases. The ripples of these changing preferences are reaching businesses of all sizes, who are feeling the pressure to evolve and adapt. But the same pressure feels different for small businesses. Independent restaurants often lack the technology to accept the variety of payment options consumers actively use today – from EMV, contactless cards and digital wallets to online ordering and peer-to-peer platforms.

But the cashless trend is not slowing down. Like all businesses, the question for SMBs shouldn’t be if they will accommodate this trend but when. Rather than debating whether or not to evolve with their customers, the industry must help independent restaurant owners understand why they need to get onboard the cashless train – and start thinking about how to do so. This article from ShopKeep will discuss how SMBs can begin to think about making that transition.

The Battle Lines

There are many benefits for businesses exclusively accepting card and digital payments, including greater convenience, stronger security, and faster speed. Quick-serve restaurants, for example, need transactions to be fast and efficient – the delay created when customers pay with cash can create a slowdown at checkout, lead to congestion and influence other customers to grow frustrated or leave.

Eliminating cash as a payment option could counteract such issues – but going cashless isn’t without its problems either. Of course, there are the additional processing fees and taxes. There is always the risk of alienating potential customers who prefer using cash. But the business impact of these cons may become negligible as things change. Consumers’ embrace of cashless culture, however, is just getting started.

Gaining the High Ground

It’s likely that many independent restaurant owners feel overwhelmed by the thought of going completely cashless if they don’t have the infrastructure to do it on their own. This is where third-party POS vendors can play a role and step up to provide support using their understanding and insight into the day-to-day processes of a small business, which uniquely equip them to unburden customers from the difficulties of dealing with a cashless customer base. Additionally, POS systems’ tracking and analytics features allow SMBs to effortlessly demonstrate their cashless commitment for the Visa challenge.

Despite an ever-changing payments landscape and an evolving, tech-savvy consumer base, the owners of small restaurants and similar businesses do not generally have the luxury of time or money to pave their own path in order to accommodate the latest trends, cashless or otherwise.

Assessing the Damage

Visa’s declaration of war on cash doesn’t come as a shock, given trends in consumer payment methods increasingly suggest a cashless future. From January 2016 through August 2017, for example, ShopKeep's full-service restaurant and bar customers saw an 11 percent increase in credit card spending. Another tell-tale sign of the tides turning in payments is that there are no organizations arguing on cash’s behalf.

Still, small businesses may wonder if the benefits of Visa’s offer will outweigh the missed revenues in cash payments over the long term. Aside from the financial aspects, independent restaurant owners need to consider how a near- or fully-cashless system will impact their customer base. For instance, how will businesses in unbanked areas fare in Visa’s war on cash? On a broader note, business owners may also fear losing a sense of their independence by adhering to Visa’s mandate.

The important thing to focus on, however, is the bigger picture beyond Visa’s challenge. The momentum behind the shift towards cards and digital payments, and a departure from cash, has a feeling of inevitability. Fortunately for SMBs, third party POS providers have also evolved to help play a key role in ushering them through this transition, equipping them with the means they need to respond to the demands of a growing cashless culture, changing payments landscape and a variety of technological hurdles the future may hold.

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