Cash or Card?
If you run a small retail or hospitality business then you probably think a lot about cash versus card payments and the pros and cons of each. It’s an important thing to think about as each can have a significant effect on your business, but some research and shopping around can really help keep your costs down.
In reality, card transaction fees are much less than they used to be and when I ran our coffee shop up to mid-2024 we were paying about 0.45% on each card transaction. That is still a cost on each card transaction but with technology, there was no real effort on our part to integrate that into our accounts or reports, meaning that 0.45% per transaction was practically our only cost associated with card payments. If your business is paying significantly more than that then you should shop around for a better deal, there are plenty of providers out there looking for new customers and the transaction fees sometimes reduce depending on the volume of transactions.
On the other hand, cash payments took a significant portion of time to handle. The till had to be balanced at the end of the day, there were trips to the bank either to deposit cash or collect bags of coins for change, and the increased bank charges associated with that all added up too. Banks no longer make it easy for businesses to handle cash. All in all, it was more costly for my business to take cash than it was to take card payments. We still accepted cash as many people are more comfortable dealing with cash, but I totally understand if a business only wants to accept card payments. It’s a tough financial climate at the moment and business owners have to do what they can to protect their business.
It comes down to the individual business and what the owner feels is best for them, and in many cases, not accepting cash will be better for the business.
As mentioned before, if you find yourself paying high transaction fees for card payments then you’re probably not on the right POS system for you. Have a look around, there are numerous providers out there such as Zettle, Sumup, Square, etc. and as an example, Zettle (owned by Paypal) are offering rates of 1.75% per transaction, but as mentioned, they can be reduced by volume and sometimes by negotiation too, so there are ways to keep transaction fees down.