Yahoo Finance Aussie worker's $1,000 win after cashless act of defiance: 'Huge difference'
James is already operating on a very small margin, but this new payment method has massively helped him.
An Aussie business owner has revealed the incredible amount of money he's saving by giving his customers the option to bank transfer. With the war between cash users and those who prefer to pay by card continuing to rage on in Australia, James Gilbert has found a way to keep his costs down and his customers happy.
The Farmer to Fridge founder told Yahoo Finance he launched the alternative payment option a few months ago. Customers who order $250 worth of meat or more can pay via bank transfer, and Gilbert said it's saved him about $1,000 in just one month.
"At the moment, we're sort of breaking even," he said. "So that $1,000 represents another advertising campaign, we could do another week of development.
"It means something to us at this point ... it makes a huge difference."
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Farmer to Fridge cuts out the supermarket as the middleman and connects Aussies with meat producers across the country.
Gilbert said his "passion project" is slowly gaining popularity, but added that it's difficult to get ahead because of the 2 per cent surcharge that comes with credit and debit card payments.
"If you've got a Mastercard transaction coming in and you're selling a $2,000 thing, that's 40 bucks," he explained to Yahoo Finance.
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"I just have to wear that cost. We run up a very, very small margin. So that $40, in some cases, is half of our operating income."
But introducing the bank transfer option has been a game-changer.
Farmer to Fridge turned over about $500,000 in July and Gilbert said if every purchase was made via card payment, he would have lost $10,000 to surcharges in just one month.
"That's a lot of money...it really adds up over the year," he said.
Most of the time bank transfers are instant, he said, while it usually takes half a day or longer for card payments to finally arrive in his account.
Drawbacks of doing bank transfers
Gilbert said his bank transfer offering does have its downsides as some customers will cause him headaches that can take a while to fix. The biggest issue is when shoppers send their bank transfer with a reference just saying "meat".
Considering meat is their whole business, it can be difficult to determine which payment that's for and he then has to comb through his order history to match the money with the customer.
He's also encountered some problems when shoppers put the wrong bank details in and he's forced to chase the customer up for payment.
"The cost savings from not having the fees can sometimes be eroded by the time spent tracking something down," he explained.
How Aussie businesses are taking payment in 2024
While it might sound like an odd way to take payment, bank transfers are extremely popular in Australia.
Research from accounting software company Xero revealed that while 86 per cent of Aussies prefer to pay with a credit or debit card for in-person and online purchases, only 55 per cent of businesses offer this service.
The biggest reason for businesses to hold back from updating their payment systems to include cards and other digital methods was expensive fees.
Conversely, 68 per cent of businesses said a bank transfer was the most common form of payment, followed by cash at 59 per cent.
While digital payments like Apple Pay and Google Pay are the leading payment methods for young Aussies, 79 per cent of small businesses fear the transition to a cashless economy will have some impact on their operations.
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