Recently, my wife and I went into a local restaurant in Portland, and the first thing we read, even before we looked at the menu was the statement, “No cash accepted. Card only please.” What?! That’s right, with 30 bucks in my pocket, but no card, we were going to have to eat somewhere else.
Not too long ago, only cash was accepted, and cards were forbidden. As new payment technologies are developed, how a business owner collects payments for their products and/or services sold will be in a constant change.
Cash has been on the decline, as consumers have found it is easier to pay using their debit/credit cards. A 2016 Gallup poll showed that there has been a significant drop in cash use over the past five years. Five years ago, 39% of Americans between the ages of 23-34 made most of their purchases in cash. The number has now dropped to only 21%. What’s more, only 18% of Americans over 55 make all or most of their purchases with cash now. The perks such as borrowing money and earning reward points, are incentives for consumers to use their cards.
Businesses have found that cash is expensive to handle and it’s prone to theft, whereas debit/credit card companies are very efficient at processing payments in a secure environment. The lag time, between when the cards are processed, and when the cash shows up in the business owner’s bank account, has declined dramatically in recent years.
Plastic cards, like cash, are becoming a thing of the past, as smart phone apps, digital wallets and wristbands are becoming the preferred form of payment. Have you used Uber or Lyft? The conveniences of using these new mobile payments methods are the wave of the future. Furthermore, a 2013 psychological study in Marketing Letters by Bernadette Kaleitner and Berna Erki, demonstrates that consumers who use cards over cash have a tendency to spend more than those purchasing with cash. Moreover, there is a general perception that paying with cards provides a higher level of convenience than cash. Banks and payment providers will continue to make things easier and faster for consumers to spend their money. Businesses need to stay current on the latest trends to keep up with the changing times and need to keep an open mind, as ideas once considered “futuristic” are now reality.