Path to a cashless society accelerating
As more and more small businesses join the EFTPOS bandwagon with cash payments becoming a thing of the past, the threat of a cashless society creeps closer and closer.
One of the most common questions we get asked at the checkouts is ‘cash or card?’, but with the natural evolution of technology – think self-serve at your local supermarket – future generations may never know what cash was.
The ease and security of simply waving a card, your phone or even your new fancy watch instead of carrying around loose cash is increasingly popular.
Paul Schnelle, an accountant from Corowa’s Potts and Schnelle, admitted we are becoming more and more a cashless society.
“I think that we are (becoming a cashless society). The use of tap and go payment systems make it very easy to use cards for all purposes, including small transactions,” he told The Free Press.
“EFTPOS enables businesses to get paid up front which is great for cash flow and consumers are becoming more accepting of paying a transaction fee for the use of the card.”
Mr Schnelle said that paying by card and electronic transfer provides people with a record of the expenses which can be easily summarised and compared to your budget, which can then form the basis of your next budget.
“Paying by cash means that you need to separately record the expenses which comes with the risk that you may miss recording something,” he said.
“Purchasing with a card means that the consumer doesn’t have to carry large amounts of cash with the risk of losing it or theft.
“If they have a rewards program linked to their card, they can accumulate points and then redeem them later on for benefits.
“Using the card (also) provides proof of purchase if there is a dispute about the goods later on.”
But while there are many pros that coincide with society’s current thirst for easy payment methods, the cons are something to be mindful of.
“Paying by credit card can result in someone overspending because they can simply ‘book it up on the card’ even if they don’t currently have the funds to pay for it,” Mr Schnelle said.
“Restricting the card limit is a good idea to stop this, or else use a debit card where you have to have the money in the account before you can use it.”
More and more small businesses have made the switch to EFTPOS, ‘cash only’ stores are a rarity these days.
“EFTPOS machines make it easy for people to pay you. The easier it is do deal with you, the happier the customer and the more likely you can make the sale,” Mr Schnelle said.
“Having an EFTPOS machine can mean that you can get paid straight away instead of issuing accounts and chasing up after months end to get payment.”
Mr Schnelle listed some reasons as to why some businesses still opt with a cash only system, saying EFTPOS facilities come with a cost which is difficult to then pass on to the consumer.
“This is the case especially for small value transactions which can make cash only a preferred option,” he said.
“Unfortunately, there is often a presumption that cash only stores are potentially trying to cheat the tax system by not disclosing all of their sales. This is not always the reason to be cash only.”
Guy Street Café co-owner Julie Bartlett, who has been using an EFTPOS machine for 12 years at her popular Corowa store, said while there are merchant fees and terminal costs that come with EFTPOS machines, the benefits for the customers means businesses now have “no option”.
“Tap and go definitely speeds up the payment process (and) many customers still prefer to insert their card so the amount is not pending in their account,” she told The Free Press.
“As EFTPOS usage continues to increase, so do our merchant fees. EFTPOS is something that customers expect now so there really is no option anymore as to whether to have it or not.”
Research by Colmar Brunton, commissioned for the Australian Taxation Office (ATO), reveals that only one in five Australians prefer using cash for purchases.
According to the report, cash is only the preferred payment method for transactions under $5 and, for anything over $50, the majority want the ease and security of an electronic payment.
The research indicates that the current trend of keeping cash at bay will only continue to gather momentum and 60 per cent of Australians admitted to carrying little or no cash at all.
Ms Bartlett said that one of the biggest changes she has noticed is the amount of younger people using EFTPOS for purchases both before and after school.
“It will be interesting to see in the next 1020 years how this changes society. Children are growing up cashless and are not learning the basics of money that they can see,” she said.
Guy Street Café used to have a 50-cent surcharge for any EFTPOS transactions under $10, but the ACCC (Australian Competition and Consumer Commission) last year banned surcharges for any amount other than what the business was being charged.
Ms Bartlett said she will be looking at including EFTPOS fee charges in their next price increase to help keep the business sustainable.
Approximately 57 per cent of the population uses less cash than they did five years ago.
Cash or card? While first introduced for larger payments, consumers now prefer to use EFTPOS even when purchasing something as small as a morning coffee.