Every Year We Inch Closer to Becoming a Cashless Society—Are You Ready? Here’s How We Got Here and How Restaurants Can Stay Ahead of the Curve
For a long time, cash was king in the restaurant industry, and for legit reasons. Not only did consumers use it more often, but we welcomed it with open arms!
Transactional fees eat into restaurant profitability, and cash makes tip-outs easier and quicker, increasing employee satisfaction. Just a few years ago, it wasn’t totally out of this world to see some places only accept cash or have signs preferring it.
But, over the last decade, and expedited by the pandemic—there has been a rapid decrease in cash flow in the restaurant industry.
Every year we’re getting closer to becoming a cashless society, with 64% of consumers believing that the U.S. will see it completely disappear within our lifetime.
Overall, paper currency has become less convenient for consumers. With the rise in e-commerce, digital wallets, and contactless payment technology, it makes sense we are now witnessing fewer bills and coins in circulation.
While consumers are a driving force in this new reality, we’d be doing this topic a disservice if we didn’t mention the influence financial institutions have had on a cashless society.
From offering restaurants incentives to go cashless to banks closing branches nationwide, making cash handling a real pain in the ass—it’s entirely in the favor of financial institution’s profitability for consumers to pay by card, and they’re here for it.
We could go even deeper and talk about what has been dubbed The War on Cash—but that would be a whole other article, so we’ll let you google that one.
Like it or not, we’re moving toward a cashless world. Even if it doesn’t go away completely, it behooves restaurants to get ahead of the trend. After all, the more forms of payment your business accepts, the broader consumer base you’re able to reach.
Here are some essential things to consider as we transition toward a cashless future.
Pros and Cons of Restaurants Trending Toward Cashless
- Pro—Less Cash on Premises. Restaurants are targeted for robbery all the time simply because they are known for having large sums of cash on-premise. By going cashless in favor of a more digital currency—restaurants are more secure from common theft.
- Con—Fees on Transactions. Let’s face it, cash is free, and that’s a nice feeling. Credit card transactions usually come with costly fees. Luckily, digital payment methods are cheaper than physical card transactions.
- Pro—Better Customer Experience. Accepting more forms of payment increases your potential customer pool. It also allows your staff to spend less time cashing out a customer and creates less room for error, all working toward a better customer experience.
- Con—Technology Fails. As I’m sure you already know—technology doesn’t hold up 100% of the time. Sometimes software or internet can be down for as little as a few minutes to as long as a few hours or more. Not having cash as a backup can be very inconvenient.
- Pro—More Customer Data. Cashless payments let you trail data on your customers and can help with your marketing efforts.
- Con—New Security Risks. For the most part, cashless payments are more secure. However, there is still the potential for security breaches, cyber hacking, and customers using stolen cards that will likely become disputed charges—costing you money.
Digital Wallets are the Future, and the Future is Now
When thinking of cashless transactions, our minds first go to physical debit and credit cards — but cards are not the only form of cashless currency.
Mobile payments are becoming increasingly popular and expected to reach $250 billion by 2024 according to a 2019 Global Market Insights, Inc. report.
Some predict mobile payments will soon replace physical cards, with 54% of consumers currently holding digital wallets.
So sure, you already accept card payments and think you’re ready for a cashless future—but that’s not enough.
If you’re not considering accepting as many digital payment options as possible, whether that’s Apple Pay, Google Pay, Samsung Pay, or the most commonly used, Venmo—You’ll find yourself behind the curve again in no time.
Additionally, mobile payments streamline the checkout process and take significantly less time to process than cash or physical cards.
Most modern, mobile payment point-of-sale systems allow employers to accept digital and physical forms of payment.
If it’s been a while since you upgraded your POS—this would be the first thing to consider when reshaping your business for a cashless society.
In Some Places, Cashless is Not Allowed
Of course, there are cautions against a completely cashless society. The main concern is the further economic barriers it will create for those without bank accounts.
There are no federal statutes prohibiting businesses from going completely cashless, but some cities and states, including New Jersey, Massachusetts, Rhode Island, San Francisco, Philadelphia, and New York City, have issued their own laws requiring businesses to accept cash payments.
This shouldn’t deter restaurants from incorporating more forms of payment, though, even in these cities and states—cashless payments are likely to be the more common transaction. Just make sure to keep some cash on hand during business hours to make change.
It could be years before we become a truly cashless society—but what a time to be alive! Paper currency has been the go-to for generations, and we’re witnessing a historical transition.
Businesses, and especially restaurants, need to be aware of what they can do to accommodate the most customers possible.
Adapting to the future and the continuously adopted technology in our everyday lives is the only way restaurants can stay ahead of the curve and ensure their capabilities don’t push potential customers elsewhere.