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Will That Be Cash or Credit?

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Will That Be Cash or Credit?

By JamieD
Published: March 24, 2010 Updated: February 16, 2011

The Small Business Cents blog recently published an article on accept debit and credit cards:

Accepting Cash Only

Accepting cash is the most commonly accepted and reliable form of payment for a business. Many small businesses today still operate as "cash only" merchants. Years ago this wouldn't have been uncommon but with today's advances in technology, business owners must ask themselves if they're hurting their bottom line by limiting payment options. If you're thinking about starting a "cash only" business or if you're considering expanding your current payment options, be sure to go over the pros and cons of only accepting cash before you make your decision...

Pro Cash payments ensure merchants that they receive funds immediately. Upon each transaction, the merchant immediately has the appropriate amount of cash in hand without the worry of waiting periods or not getting paid at all.

Pro Cash is the simplest form of payment and therefore involves less bookkeeping. For a business, not only means less stress and hassle, but it also may save money in the time and labor it would take for a bookkeeper to maintain additional payments.

Pro There is limited risk of fraud when accepting cash only. Although there have been cases of counterfeit money, it's much less common than other types of fraudulent payment.

Pro "Cash only" merchants don't have to worry about third-party factors or fees that come with other payment options.

Con Because customers are carrying less cash with them than they used to, it is no longer the most popular payment option. If you sell higher priced items, there is a good chance that a consumer would not have enough cash on them to make the necessary payment.

Con Your business may lose customers by accepting cash only. As card payments become more and more popular, many consumers expect this to be an option when making purchases. If they find that a particular store only accepts cash, they may feel inconvenienced and seek out a competitor where plastic is accepted.

Accepting Card Payments

Card payments have become significantly more popular over the last decade. They are convenient, flexible, and have become increasingly important in business commerce. If you're business is considering what forms of payment to accept or if you'd like to expand the payment options of your "cash only" business, be sure to go over the pros and cons of accepting card payments.

Con Card payments come with an increased risk of fraud. Although there are laws and security measures that help.

Additional Resources

  • Consumer Credit Law: An Introduction to the Fair Credit Billing Act


Message Edited by JamieD on 11-03-2009 01:20 PM

About the Author:


As a consumer, I always use a debit card and hardly ever pay cash.  Every once in a while I'll come accross somewhere that accpets cash or checks only and, though it may seem a little inconvenient, if I'm serious about a purchase, there's almost ALWAYS an ATM near by.  While starting an art bussiness and faced with this decision, I've decided to opt for the cash/check only and see how stongly customers urge for payment by credit card or debit and how large those transactions are to see if it would be worth it--keeping track of customer preference and cost vs profit of the credit card machine is the best way to decide if you ask me.
Thanks for your input jaymar2! You're right - many businesses that have a great deal of very small transactions find cash a smarter option. Does anyone else have personal experience or thoughts on the cash vs. credit debate?
I think it depends on the type of customer you serve, if your business is a local shop where transactions are on average $5 or less, I think its fine to stay cash-only; customer are used to paying for small transactions in cash, also it costs more to carryout small transaction. There's also the issue of trust, some customers might not be comfortable leaving their card details with a merchant in the local market, in these cases the customer is happy to pay by cash. 

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