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Will more merchants stop accepting cash in the near-term?

Is it time to go cashless? Ever since paper bills were first introduced in North America – which traces back to before the United States officially existed, according to the U.S. Currency Education Program – cash has been king. But with numerous alternative payment systems now available to consumers, there’s some question as to whether its reign may be coming to an end. For starters, fewer Americans are using cash. Indeed, based on the most updated figures available from Blackhawk Network, 87 percent of the population used paper money in 2016. That’s down from 93 percent in 2015. This is particularly true among restaurateurs, a number of whom have already made the transition to cashless payments or are in the midst of trial runs.

 Fewer Americans are using cash

The examples are legion. Tender Greens is perhaps the most well-known restaurant franchise whose point of sale system doesn’t support cash. With 27 locations throughout the U.S., according to its website, the Culver City–based fast-casual dining facility that specializes in sustainability accepts debit cards, credit and contactless payment systems, USA Today reported earlier this year.

Similarly, Sweetgreen – whose locations aren’t as widespread as Tender Greens but also caters to health foodies – is a no-cash zone.

“Several household name restaurants have flirted with going cashless.”

A number of other major franchises have flirted with going cashless. As documented by the Associated Press earlier this year, Starbucks, Shake Shack and Dos Toros are among them. For Dos Toros, though, the no-cash policy is now permanent.

Leo Kremer, co-owner of Dos Toros, told the AP the transition has actually been quite smooth.

“For the vast majority of customers, there’s no reaction at all,” Kremer explained. “They’re already paying with their cards. And the significant majority of cash customers don’t have any problem with it either.”

But the cashless policy has gone over like a lead balloon in some parts of the country. Richard Gottfried, who represents the 75th District in the New York State Assembly, told the New York Post he believes the move is fundamentally unfair.

Lawmakers launching resistance campaigns

“I think Americans ought to have a right to pay with cash,” Gottfried, who in April introduced a piece of legislation mandating that all state businesses accept cash, stressed. “It makes sense to put a halt to this before it becomes too common and too hard to stop.”

Gottfried isn’t alone in his discontent. Lawmakers in other parts of the country are taking similar steps to ensure cash remains universally accepted. Edward Burke, alderman in Chicago’s 14th ward, has introduced a bill requiring businesses in the Second City to include cash in their POS systems. A committee is reviewing his proposal, USA Today reported.

Meanwhile, a substantial percentage of Americans contend that a cashless society is inevitable, according to a poll conducted by YouGov. Of those, 48 percent said they not only believe cashless is the wave of the future, but that it will be a reality within the next five years.

Richard Foster, CEO and co-founder of tech firm GATE, which commissioned the survey, said the bid to go sans cash is mutually advantageous.

“The benefits of going cashless benefit both the consumer and merchant; It cuts down on dropped funds, theft and speeds up the payment process.”

— Richard Foster, CEO and co-founder of tech firm GATE

If you’re a restaurateur who’s considering making the move, should you go cashless? Depending on where you’re located, this question may be moot, because certain states have laws in place requiring companies to accept cash, Massachusetts being one of them. Otherwise, your decision is a matter of weighing the pluses and minuses. Medium compiled a few of the factors to consider:

The pluses

Lines move quicker
Although cash may seem like a fairly quick way to facilitate a transaction, it’s actually slower than alternative payment methods. Indeed, since the implementation of EMV chips, transactions with plastic average a mere 2.5 seconds long. Cash averages 30 seconds or longer.

Insight into buyers’ spending habits
People are creatures of habit and since alternative payments are recorded electronically, you can gain insight into how your customers utilize their discretionary income, which can inform your marketing strategies. 

The minuses

May lose some customers
Although numerous polls show cash isn’t as popular as it used to be, it’s still widely used, particularly among baby boomers. Should you decide to go cashless, you may miss out on their patronage.

Increased cybersecurity risk
Breaches are increasingly common, largely because electronic payments can be tracked and POS systems hacked. In 2017, debit card theft rose 39 percent from the previous year, according to FICO.

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