And he causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads: And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name. – Revelation 13:16-17
Article By: Ethan Wolff-Mann
If you try to pay for your coffee at Bluestone Lane in New York City w/cash, you will be gently told that cash is not accepted & asked if you have a credit card. Occasionally, this can lead to mild confrontation (“Whaddayamean you don’t take cash?”) from someone unfamiliar w/the cashless policy, but for the most part it has started to help streamline businesses w/in the past 2 years.Across the country, chiefly in cities, a growing number of businesses are electing to go cashless for a number of reasons. According to Jesse Dorogusker, head of hardware at Square (SQ), which handles the payments for more than 2 million small businesses, cashless has the beginnings of a trend as more & more businesses decide that the pros of going cashless outweigh the cons.
“People have long underestimated the cost of accepting cash,” Dorogusker told Yahoo Finance. “Now we see sellers realizing that cash isn’t free.”
Cash may be cheaper than credit & debit cards in terms of the fees they carry for hardware & processing, but some businesses have realized – after heavy consideration – that they’d be better off leaving cash behind.
Why some businesses are ditching cash
At the time Bluestone Lane switched its dozen-plus locations over to cashless in September 2016, only 10% of transactions were made in cash, making the change not a particularly big 1. According to Andrew Stone, Bluestone Lane’s marketing director, dealing in cash felt cumbersome from a transactional standpoint, from a health standpoint – cash is dirty – & a logistical standpoint, as guarding & transporting cash is often a significant hidden cost.
Nowhere is this more pronounced than for food trucks, which are more vulnerable & have even more logistical concerns. At Señor Sisig’s, a San Francisco-based network of 5 Filipino fusion food trucks, cash made up 19% of its payment mix when it decided to move to a cashless system.
“Every year it was dropping 5% to 10%. Soon enough we were going to be less than 10% cash,” said Evan Kidera, 1 of the founders of Señor Sisig.
Square has borne data on the move to cashless out on a large scale. According to Dorogusker, there is a strong trend towards credit cards across the board. Both businesses told Yahoo Finance cards were faster, simpler & easier.
“It was mostly cash, then 50-50, & now we’re seeing card & preference for card,” said Dorogusker.
With a dwindling amount of cash customers, it just wasn’t worth it for Señor Sisig & Bluestone Lane to accept bills. For Señor Sisig, the amount of cash that had to be handled for the entire network of food trucks was onerous: counting cash at the moment of sale & then making the rounds to collect, recount & recheck total sales from each food truck at Señor Sisig main headquarters.
“You’re talking about 3 hours of counting in & out,” said Kidera. “We were spending over 40 hours a week counting cash just at the hub. It felt like we were running a bank.”
Square’s Dorogusker noted that both the old cash-only businesses & the cashless upstarts actually come from the same place – practicality.
“If you’re not operating at scale, you can count the money, so again it’s not an unreasonable impracticality,” he said. But some business are waking up to the “ignored cost” of cash. “If you zoom out, might think the calculation of handling cash is too expensive & the 2.75% on a credit card transaction & benefits from digitized payments are worth it,” said Dorogusker.
The transition has been smooth
The month before the change, Señor Sisig began notifying people via social media, newsletters & telling customers at the food truck in-person. Not surprisingly, no 1 said anything until the change had been made, but Kidera said that heavy signage warning customers that cash isn’t accepted has made things easier.
“Most of the feedback has been great, but some people don’t agree w/the change,” he said. “For the most part once we talk to them & give them more info on why we went cashless they tend to understand.”
For the employees, the change has been a welcome 1. Kidera said that tips from cards & other cashless means are generally 6+ times higher than cash, & the no-cash signage makes it very clear that the only things on board are delicious food & a few card reader tablets.
Bluestone Lane, which had a 4-month grace period where they’d still take cash, was nervous to see how cashless would be accepted, but was pleasantly surprised. Of course, a select few customers were miffed.
“I wouldn’t say we didn’t have anyone write in to say cash money is legal tender,” said Stone, who noted that tips didn’t change, but sales sped up.
While the U.S. dollar is “legal tender for all debts public & private,” the U.S. Treasury website FAQ notes that there is
“no federal statute mandating that a private business, a person or an organization must accept currency or coins as payment for goods &/or services.”
As it stands, businesses like Señor Sisig & Bluestone Lane are joined by the likes of Starbucks & Sweetgreen. In a larger context, however, since the number is still small, cash is certainly not on notice. And that may be a good thing, as cash is still king for many people like children who don’t yet have cards or the underbanked who don’t have access to the cashless financial system. But as a pilot, the reviews are in & they’re good.
View full article at: https://finance.yahoo.com/news/heres-happens-business-gets-rid-cash-145756968.html