How small business can benefit from customers using cash.

As Canadians continue to embrace technology and the convenience it brings to our every day lives, we may find ourselves using digital payment methods more frequently than cash. The use of cash has been declining due to reasons such as technological advancements, convenience, and changing consumer behaviour. Many prefer to stick to digital payment solutions, such as debit, credit, and mobile payments. It eliminates the needs for cash and can be used in-person and online. While embracing technology has many benefits, such as rewards from using certain cards, security and protection, etc., the opposite can be felt for small businesses who may benefit more from their customers using cash.

Small businesses can benefit from their customers using cash for many reasons:

1. Lower transactions fees – When customers use their debit or credit card, there are fees for every transaction that is charged by the banks and payment processors. The cost of the transaction to the business owner can vary. Interact can cost between $0.05 to $0.10 per transaction, while credit card transactions can cost between 2%-4% of the total transaction amount. These fees can add up, however if customers use cash, it can eliminate these fees, allowing businesses to retain more of their revenue.

2. Immediate access to funds – Cash payments provide immediate access to funds, which can be crucial for small businesses that rely on a steady flow of cash flow to manage the day-to-day operations. When customers pay with a credit card or debit card, the funds are typically not available to the business account until the next day.

3. Reduced risk of chargebacks – A chargeback occurs when customers dispute a transaction, and the credit card company can reverse the charge. This can be costly and time consuming for small businesses. Cash transactions do not have this risk, providing more security for the business owner.

4. Simpler accounting – Handling cash can simplify the accounting process for some small businesses. It is straightforward to track and manage cash payments without the need for reconciling multiple electronic transactions and does not require sophisticated accounting system or costly accounting program.

5. Security – With cyber-attacks and data breaches on the rise, cash transactions can reduce the risk, giving both the business owner and customer peace of mind knowing they will not be targeted.

6. Lower equipment costs – For the small businesses that operate on cash only, they do not need to invest or maintain payment processing equipment, such as card readers and POS systems which can be a significant expense.

While digital payments are the most popular among consumers, cash transactions can still provide benefits to not only the business owners, but to consumers as well. When using cash as a consumer, it is easier to stay within a budget, avoid interest and fees, and avoid accumulating debt.

If you have relied on digital payment methods, and found yourself to be in a cycle of debt proving difficult to break, there are options.

If you are looking for advice, or a second opinion about your debt, it does not cost anything to talk about your options. Every financial situation is unique and viable options can differ from person to person. A conversation free of judgment is the first step to determine options for debt that make sense to you. For a free consultation, please call or text (506) 645-1814 or email jaime@tackledebt.ca; or visit www.tackledebt.ca.