Cashless, cash-only, or hybrid? Choose the best payment method for your business

Editorial Team

5 min read
Person paying cash for jewelry

Even before the pandemic lurched the digital age noticeably forward, the world was headed in a paperless direction. The prevalence of QR code menus, digital signatures, and contactless payments makes it clear that commerce is on a steady path away from cold hard paper cash.

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Transactions as ordinary as buying your morning coffee are now most often accomplished with chip cards, a touch screen, and a digital tipping option for your barista.

As a business owner, you may be tempted to think that getting ahead of the curve means ridding your store of cash transactions all together. But don’t be fooled: cash is far from dead, and there are plenty of businesses that not only still accept old-fashioned paper money, but accept it exclusively. So what kind of payment method is right for your business? Whether you’re a newly minted entrepreneur or a long-time pro, here’s a breakdown of the most common options to help you decide.

READ: How soon until wallets and cash are a thing of the past?

Cashless payments

What it is: A business that accepts only digital, contactless payments; like those from credit cards or digital wallets.

PROS:

  • Easy customer experience: Accepting digital payments quite simply leads to the easiest and fastest checkout experience for your customers, increasing customer satisfaction for everyone who walks in the door.
  • Reduced risk for you and your customers: Cash and coins may seem foolproof, but believe it or not, digital payments may actually be the best option for keeping your money safe. Any business that’s holding onto cash is subject to loss, theft, damage, and human accounting errors. Digital payments, on the other hand, are usually protected by banks and cybersecurity measures. If you’re using a Clover POS, they’re also logged instantly with our business tracking software.
  • Complete payment transparency: Since digital payments are logged at the point of sale, they provide a more accurate and transparent record for both you and your customers. That kind of data can be helpful in processing returns, dealing with fraud claims, and even analyzing transaction trends within your business.

CONS:

  • Accepting credit cards comes with fees: Business owners can expect to pay certain credit card processing fees, but there are many factors involved that determine what the fees are and how they’re calculated. Some fees are set by the credit card processor, while interchange pricing is set by the credit card brands and issuing banks and can vary based on how a business accepts credit cards (e.g. in-person, online, hand-keyed). Some business owners may need to factor the cost of these fees into the way they do business to help make accepting credit cards worthwhile.
  • Not everyone has equal access to banking: This one’s important. Eliminating cash sales from your business could mean leaving potential customers behind as not everyone has easy access to banking or lines of credit. Depending on where your business is located and whom it services, you could be leaving serious money on the table by going completely cashless.

READ: Should your business go cashless? Pros & cons

Cash-only business

What it is: A business that accepts only cash, and doesn’t process payments from credit cards, debit cards, or digital wallets.

PROS:

  • You receive your funds immediately: While credit card transactions can sometimes take a day or two to process, cash is instant. You simply receive the money at the time of the sale.
  • Avoid fees and save money: By avoiding the fees associated with credit card transactions, your business can save a good amount of money by going cash-only, especially over the long term.
  • You can’t hack cash: Even with top of the line cybersecurity, digital payments are always going to be more vulnerable to cyber attacks and online fraud than paper money.

CONS:

  • Some customers will find it inconvenient: Most people want to pay for their items quickly with a credit card, and as a result, they may not even be carrying cash. A customer who makes it all the way to a purchase point, only to find out that they’ll need to visit an ATM in order to pay for their item, is having a very inconvenient customer experience and may not want to return to your business.
  • Accounting can be more difficult: While digital payments can be logged and recorded instantly, a cash-only business will have to be very on top of their paper accounting in order to maintain an accurate sales record and avoid tax messes at the end of the year.
  • What about online?: If you’ve got a cash-only business, you’re blocking yourself from making online sales, which can be a great source of income for any business. Even if your business sells pizza by the slice in Brooklyn, why not let a fan in Indiana purchase a t-shirt on your website?

Hybrid

What it is: A business that accepts both cash and digital payments.

PROS:

  • All payment types are welcome: If your business accepts both paper and digital payments, that pretty much covers everybody. The hybrid model is built for the modern-day economy, where most people are carrying credit cards and some prefer to use cash.
  • Best customer experience: By offering a wide array of payment options, you never have to get in the way of someone who wants to spend money at your business. Customers will remember that, and will be more likely to return to your business if they know they can pay however they want.

CON:

  • Accounting can be more difficult: The more payment options you have, the more you have to keep track of in terms of accounting. A hybrid business might have to spend some extra hours manually entering cash transactions alongside their digital ones. However, with a modern POS system like Clover, you won’t have to worry about it. All forms of payment (including cash) can be logged instantly for more accurate up-to-the-minute sales records.

Clover can help you accept payments however your customers want to pay. Contact a Clover Business Consultant today.

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