Recent technological advancements have allowed brick-and-mortar businesses of all sizes to start accepting credit cards, digital wallets, and other forms of non-cash payments. This has led to a slight decline in overall cash transactions as many of these companies are now opting to go cashless.
Proponents of this system say that a cashless system saves both time and money by preventing the business from having to count or hold cash on-premises. They also say that the law doesn’t require companies to accept cash. The website of the Federal Reserve’s states: “There is, however, no Federal statute mandating that a private business, a person, or an organization must accept currency or coins as payment for goods or services. Private businesses are free to develop their own policies on whether to accept cash unless there is a state law which says otherwise.”
So why haven’t more businesses jumped on board with a cashless business? As it turns out, there are several key benefits of having a cash-based business that won’t be going away anytime soon. In this blog post, we’re going to look at five benefits of a cash-based business and why you should think twice before going electronic-only.
The FDIC reported that around 6.5 percent of all households in the U.S. were unbanked as of 2017. This means that they do not have a bank account, nor any means of paying for purchases electronically. They are a huge, cash-only demographic who cannot patronize a cashless business.
If your business is not in a highly affluent area, you might reconsider going cashless. Even companies that are located in the so-called “upper middle class” neighborhoods still attract customers from all walks of life—including those who don’t have a bank account.
A cash-based business also lessens the chances of fraudulent activity. Stores that accept multiple forms of electronic payment, such as credit cards, Apple/Android Pay, or other digital wallets spend more time reconciling accounts and can expose themselves to higher risk due to the insecure nature of electronic payments.
While cash-only businesses still run the risk of unknowingly accepting counterfeit money, that risk can be mitigated by using a smart safe that’s equipped with counterfeit detection technology. These types of safes are far more accurate in detecting phony money than a counterfeit detection pen.
No Transaction Fees
Running a cash-based business also helps lessen the fees that companies have to pay. Some credit card and electronic payment companies can have fees as high as 4% of the total transaction. This amounts to tens or even hundreds of thousands of dollars every year.
While the convenience of swiping a card may be attractive to a customer, the merchant is the one who will have to eat the fees or pass them onto the consumer. A cash-based business only has a few recurring costs, which may include deposit fees, however, customers are able to mitigate these based on the lending relationship they have with their financial institution. If a customer elects to use armored car transportation, the smart safe helps to reduce the number of pick-ups.
It’s much easier to manage the books for a cash-based business than one that accepts multiple forms of online payments. Credit cards, electronic wallets, and even Bitcoin present additional accounting challenges that require extra time on behalf of the merchant, their bookkeeper, or accountant.
A cash-based business is also very attractive to merchants who find themselves dealing with disputed credit card charges regularly. Just one substantial financial loss can take weeks to resolve and will negate any benefits received from accepting online payments or electronic wallets.
Another benefit of a cash-based business is that the funds are available the day after they’re deposited into the safe under the counter or in the back room. A smart safe, such as AMSEC’s CashWizard Smart Safe can help save even more time by streamlining the cash management processes which are highly prone to human error.
The time it takes for manual counts is significantly reduced as a cloud-based safe not only keeps track of daily cash volumes but provides comprehensive reports and analytics. They can also offer valuable insights that will help owners make intelligent business decisions.
Smart Safes for Cash-Based Businesses
Cash is still king in this digital age of credit cards and online payments. A smart safe can help cash-based businesses save time, money, as well as provide peace of mind that their hard-earned money is safely stored in a highly secure safe. If you’d like to learn more about AMSEC smart safes, visit our website here or submit the contact form at the bottom for more information.