Why Cash-Only Businesses Should Start Accepting Cards
According to the Bank of Canada, about 33% of small businesses are cash-only. While it might be easier to start a cash-only business in some ways, it comes at a cost.
With the modernization of payment technology, wallets are shrinking. Nowadays, you can have your credit card on your phone, watch, web browser, computer, and virtually any other electronic device. The need to carry a wallet is decreasing. The amount of cash an average Canadian carries has been steadily decreasing over the past years, showing that Canadians are increasingly living cashless lives. With less cash available to consumers, it is more difficult for cash-only businesses to make a sale.
Additionally, there seems to be a disconnect between cash-only small businesses and their customers. While around 80% of Canadians prefer to pay with a credit or debit card, only 11% of cash-only small businesses believe that cards are their customers’ preferred payment method. Businesses need to understand that while they can provide an amazing product to the customer, a poor payment experience can lower sales.
Finally, there is a psychological effect that comes in to play when a customer purchases with a card compared to cash. According to this study by professors at Massachusetts Institute of Technology, willingness to pay can increase when customers use a card instead of cash. This effect can be very drastic at times, and suggests that customers spend more when they use a card instead of cash.
These are just some of the benefits that a business gains when accepting cards. It may seem like a daunting task at first, but it is well worth.
If you are interested in getting started with collecting card payments for your business, check out www.payswift.ca. We are building a mobile point-of-sale solution that you can use to turn your phone into a payment terminal, so you can get up and running quickly.
