The world has gone digital in countless ways. Today, people can shop and pay without ever opening their wallet. Digital currency was created by banks and payment providers as a way to increase corporate profits, but this does not bode well for the small business.
What This Means For Businesses
Paying with your smartphone seems like a smart idea. It eliminates the need to carry cash and credit cards, making it safer and more streamlined. A cashless society helps credit card companies boost their bottom line with the increased processing fees that are charged to the merchant. It’s great for them, but not so great for the small business. Places like Starbucks and McDonald’s can make up for these processing fees through sheer volume, but Mom & Pop’s do not have that luxury. If society does go totally digital, it’s the small businessperson who will pay the price.
It Won’t Happen Overnight
A cashless society won’t happen overnight, as nearly 80% of the world’s transactions are still done with cash. As long as people still have cash to spend, businesses must be accommodating to them, or else face the loss. One way for small businesses to begin offsetting their credit card costs is to encourage the use of cash by implementing a cash discount program. This offers an incentive to those who are willing to pay with cash. Those who pay with credit card will be subject to a service fee on each transaction.
Embracing Cash While Offsetting Costs
While it’s true that a cashless society is possible in the future thanks to digital currency, businesses can advocate for themselves by embracing cash payments. By offering a discount to those who pay with cash, it encourages people to stick with what’s worked in our country since its inception. A cash discount program can help small businesses offset the fees they incur when they accept digital payments and credit cards, while keeping them relevant in changing world.