Accepting Cash vs. Card: What Are the Benefits?

For small business merchants who haven’t made the move to processing credit, accepting cash only may not be the best option for your customers or your business.

For many small businesses just starting out, the notion of getting a machine that processes credit may seem daunting because they are unsure of whether or not it is worth the cost. They want to make money, but they also want to decrease unnecessary costs as well.

This thought is a familiar one for many, but what are the real implications for customers and merchants when it comes to the benefits of using cash vs. card?

Benefits of Using Cash:

  • Widely Accepted Everywhere – Cash is universally accepted in just about all stores, restaurants, vending machines, etc.; some places are cash-only to avoid dealing with credit and debit
  • No Interest Fees – There is no interest on cash payments since the total payment is given in full upon purchase; there is no factoring in interest payments or late fees
  • No Accumulated Debt – You’ll never owe creditors because you’ll never borrow money
  • Identity Security in Simplicity – Your identity cannot be stolen by using cash as it has no link to your financial information

Benefits of Using Credit:

  • Online Shopping – To buy anything online at all, a credit card is required to make these transactions
  • Credit Score – To build credit, one must open a line of credit, use it, and pay it back on time to establish good credit
  • Rewards – If certain credit cards are used responsibly, rewards such as points, miles, or even cash are possible
  • Financial Security – A customer is better off carrying a credit card instead of large sums of money in the event of a criminal act, especially when traveling overseas; a hold or cancellation can be placed on a stolen card, thus protecting the account attached to the card
  • Faster than Cash – A card can be swiped or keyed in faster than counting physical currency

Which is Preferred in the Business World?

  • Small Businesses should accept credit cards so they can reach out to more customers and to make it more convenient for those who prefer that method of payment (which is consistently growing)
  • Small businesses may reach more customers through credit cards, but they typically have to require a $5 or more purchase to offset the processing fees
  • Studies have shown that people tend to spend more money if it’s not physically leaving their bank account at that moment
  • Credit card transactions are automatically itemized by the payment integration system while physical money has to be itemized by hand

Overall, merchants prefer credit cards because of the convenience it offers to their customers, who are increasingly using cards over cash. Some customers no longer carry cash because they expect every place they go to have credit processing capabilities. Don’t get left behind the competition simply because you don’t feel processing credit cards is necessary for your business. The truth is that things are shifting towards an all electronic currency exchange system in which debit and credit cards will rule every transaction.

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Sally Wells
Contributing Editor

We know how time consuming it is to choose the right card processing provider so we did all the hard work for you. We collected user reviews from the top merchant services to help you decide with card processing company is right for you. Choosing the right provider will save you time while you work on growing your business. 

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