In an era of e-everything, it might be surprising to learn how big a role cash still plays in payments. Folding money for goods and services still accounts for over a third of U.S. payments.
The demand for payment convenience grows as fast as new ways to pay emerge. And payment processors like North keep coming up with inventive incentives such as free hardware and no-code solutions that remove the stress from switching.
So why is cash still so prevalent? Examining the reasons can help identify strategies for converting those cash transactions into electronic payments.
The Reasons For A Cash-only Business
It Saves Money
Merchants will complain that high interchange fees charged by credit card companies cut into their bottom line. The price of admission for using credit payment systems either affects profits or it gets passed on to customers in the form of higher costs — which often means those shoppers shop elsewhere. Cash-only merchants may feel that avoiding these costs saves them money and helps them keep business.
Privacy Concerns and Hacking Fears
In an era of always-on, always-there technology, protecting one’s identity and purchasing behavior can be appealing. Cash-only businesses gain this benefit. Many businesses — and consumers — don’t like the idea of their transaction data being used and sold by electronic payment providers.
Security is another oft-cited benefit to a cash-only operation. Hacking of both merchant and customer accounts is possible with electronic payments, and the fear of a data breach is powerful for some.
Why Avoiding Electronic Payments Affects Bottom Lines
Overwhelming popular demand is a major motivator to accept credit, debit, and digital payments, but there are also deeper incentives that a cash-only business may not be considering. The following sections outline some of the key ways that electronic payments can boost your business.
Mass Appeal
According to Forbes, 76% of consumers prefer businesses that accept electronic payments. Cashless transactions also make it easier for a merchant to sell overseas. Should they want to go global, international payments and exchange rates are easier with electronic payments.
Tracking
Electronic payments are easier on the accounting end. Keeping tabs on paper receipts can be trying and tricky. Come tax time, having everything aligned and electronic is an enormous time-saver — time that merchants can use to drive more sales and grow more business.
Speed
Cash-free is faster. Making change adds minutes to each transaction. Again with that “time is money” thing, but it’s simple math: The more transactions you process per minute, the more money your business takes in.
All good arguments for electronic payments. The real meat lies in concrete solutions that will convince a cash-only merchant that going electronic is both beneficial to their business and easy.
Health
Touchless payments in the post-pandemic world are still a big thing. Many have become accustomed to paying this way — and they don’t want to go back to exchanging “dirty” money.
Crime
Cashless payments reduce the risk of theft. Which is to say, having a lot of cash on hand is attractive to criminals, and if cash is stolen or lost, the fraud reimbursement that's often available to reconcile digital payments isn't available for cash-based transactions.
Overcoming Cash-only Merchant Concerns
Electronic payments offer features and services that a cash-only operation isn’t capable of. The key is helping business owners see past their resistance — and see the many reasons for electronic payments. North has the cure for card phobia.
Interchange Fees/Merchant Discount Rates (MDR)
Payment processing fees may be the most common hurdle for merchants converting from a cash-only business model. These fees, paid to acquiring banks, payment processors, and card networks for the convenience of accepting credit or debit payments, deter cash-only merchants. North, however, offers low, competitive interchange rates that are affordable on any budget. And Paytrace, a North subsidiary, offers interchange optimizations that, depending on the transactions performed, can reduce these fees even more.
Hardware at No Cost
Moving from cash to electronic payments doesn’t have to be costly or complex. North offers merchants device placement at no cost — providing partners with the hardware they need to start accepting credit, debit, and contactless payment formats right away.
Payment Software and Processing That’s Easy
When it comes to the software needed to accept electronic payments, EPX offers a hosted checkout option — a no-code solution that is plug-and-play. White-label options mean that merchants can use their own logos, so the checkout experience becomes a seamless part of their existing brand.
Solutions Cash Can’t Provide
Providing customers with the ability to pay with a card or digital wallet expands a merchant’s appeal — give the people what they want. Electronic payments also bring very tangible advantages. The ability to harness technology both increases profitability and simplifies business operations. There are efficiencies and revenue streams that can only be achieved through electronic payments.
Recurring Billing and Autopay Features
North Developer offers a Recurring Billing API that automates this powerful profit tool. Subscription billing tools offer a simple way for regular customers to always pay on time. Customers enter their information once — set it and forget it. For business owners, it means the payments come on time each billing cycle — it’s a revenue stream they can regularly count on.
Automated Invoicing and SMS Payment Options
These tools give merchants a fast, convenient advantage over cash. What took days to send and receive via traditional billing methods is reduced to a nearly instantaneous exchange. Invoices can be sent and paid within minutes. Automated invoicing can be set up quickly and easily with Payments Hub Invoices.
Value-Added Integrations
Entering the electronic-payment world brings powerful convenience to running a business. Services like automated sales tax and business insurance options can take on time-consuming back-office tasks — giving merchants more time to grow their business. North Developer has a host of integration options.
How To Get Started
Working with an experienced, insightful payments partner is critical. We have options to help you get a business up and running with card-present integrations in no time — go North and go cashless. Contact us to learn more about how to accept digital payments with the North ecosystem.