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Is Cash Really Still King? A Look Into Modern Payments

Today, most consumer transactions are processed via a card, with many more moving to their phones via Apple Pay and other payment apps. How many people do you see in Starbucks paying with cash, compared to paying with their phones using the Starbucks app? As consumers grow more comfortable using apps, let alone their cards, small business owners need to consider how they might accept payment.

Interestingly enough, some businesses have decided to entirely abandon accepting cash payments.

There’s a couple common sense reasons for this. With a super small business, you save counter space without a cash register, and you reduce security concerns associated with carrying cash. A lot of people perceive that credit and app transactions take less time (no one has to count change) so they might opt to not accept cash at all.

For a lot of consumers, particularly younger ones, this isn’t a problem at all. According to a survey referenced by the New York Post, only 40 percent of consumers carry cash, leaving a majority of people out and about, shopping and spending without an actual paper bill to be found on their person.

But, a Philadelphia City Councilman found this not only to be a problem, but enough of one to spearhead legislation requiring businesses to accept cash.

The idea behind the legislation is that not accepting cash is simply unfair for a large portion of the population - and numbers do give this perception credence. According to the FDIC, over 8 million US households are “unbanked” by their definition; unbanked meaning that no one living in the household has access to any type of checking or savings account.

For this population, not accepting cash means they can’t make a purchase at all. Many lawmakers suggest that not accepting cash is essentially discriminating against the poor, disadvantaged, or just young population; how many ten-year-old’s wanting to spend their allowance on candy will have a Chase card ready to swipe?

On the other end of the spectrum, some people feel that the government stepping in to level the playing field is tantamount to meddling in a business. At the end of the day, whether it’s a good idea or not, it should be up to the business owner to decide how they want to accept payment.

However you feel on the subject, this does create a bit of a new market that can serve as a middle ground between traditional cash transactions and the new e-commerce and digital transfer of funds.

Maybe the question for policymakers isn’t whether you should force businesses to accept cash, but to figure out a way for those that are unbanked to be able to spend.

According to a great article on the subject on CNET, recent Super Bowl hosting Mercedes-Benz Stadium in Atlanta decided that they would change their concession stands and stores in stadium to cashless in order to expedite lines and cut costs.

Their solution was to bring in Visa kiosks that could convert cash to a card so that fans that were unbanked could still buy what they wanted while at the stadium.

Middle ground solutions like that could end up being the way to go. As a smaller business owner, it leaves you with an interesting question to ponder:

What will you accept and how will you work to level the playing field for your consumers and clients?

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