Published on Aug 31, 2015
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The cashless economy is well and truly upon us, with Australians making more than 225 million debit and credit card transactions each month.
Research reveals cash-only businesses slow to embrace alternative payment options run the risk of losing sales and customers.
A report published by consultants Economists International (EI) tracked growth in five businesses following diversification of payment options. One business grew nearly 20 per cent in two years and all businesses increased average transaction values after introducing card payment options.
The EI report findings are in line with other research. Figures released in 2012 from the United States estimated businesses missed out on an average of $7,000 in sales per year by not accepting card payments. That would likely be a conservative estimate in 2015 considering Australian card transactions nearly doubled between 2009 and 2013.
Cessnock City Council Economic Development Manager Jane Holdsworth said we just have to consider our own personal experiences with cash-only transactions to recognise the benefits of payment choices when making purchases.
“We’ve all experienced it – walking into a store intending to buy a quick coffee or lunch only to walk right back out again because ‘Cash Only’ is emblazoned across the register and all you have in your wallet is debit or credit card,” Ms Holdsworth said.
“Alternatively, you fish around in your pocket for change and find you have enough for a coffee, but not enough to make that all-important impulse buy and add a piece of cake to your purchase.
“Customers remember these inconveniences and it can drive them to take their business elsewhere.”
Weigh the costs
A common reason businesses resist adding EFTPOS or mobile payment options is dreaded merchant fees.
Ms Holdsworth said that whilst non-cash payments generally do attract merchant processing fees, as the EI report points out many businesses might not be weighing those fees against the cost of accounting for cash transactions.
“Manual cash handling and banking, as well as theft prevention, all take time and money and present a cost to business,” Ms Holdsworth said.
Explore the options
Technological advances mean businesses no longer have to take the traditional route of installing an EFTPOS machine. And it’s not only banks that offer solutions for businesses looking to diversify transaction methods. Most banks and a number of tech giants, including PayPal, offer online wallets, apps and simple hardware that transform a mobile phone or tablet into a merchant facility. Check out the clip below to find out more.
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