Yahoo Finance Great cash divide as more backflip against Aussie majority
Less than 5 per cent of customers pay in cash at Anna Rogers’ Adelaide patisserie with the majority still opting for card payments.
An Aussie small business owner has revealed why she decided to switch her cashless patisserie to accepting cash payments. Despite only a small proportion of customers paying with physical cash, she said there can be some big "downsides” to being wholly digital.
Anna Rogers launched Prove Patisserie with co-founder Megan Bowditch in October 2020 at the height of the pandemic. Rogers told Yahoo Finance the Adelaide patisserie was initially cashless given it primarily accepted orders online.
The business now has a retail space and despite it being “more work” to offer cash payments and ensure there was a cash float in-store, Rogers said she was happy to offer it as an option for customers.
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“With hospitality and the service industry, you’ve got to be able to assist people as much as possible if the desire is there,” Rogers said.
Rogers said only a small percentage of customers currently paid in cash, with many opting for contactless digital payment options.
“It would be less than 5 per cent easily. There is even a differentiation between people who want to pay on an actual card versus their phone or their watch - 95 per cent would be on their phone or watch,” she said.
“There is a small proportion who use their physical card and an even smaller proportion than that again with cash.”
Rogers said she’s experienced two tech outages in the last six months and being able to accept cash meant she was able to mitigate against some of the disruption.
“One was a technical outage which affected a fair few people. It affected a lot of customers and those customers could at least pay with cash,” she said.
“With a perishable good such as ours, there’s obviously that downside to being wholly electronic.”
Other Aussie businesses have also re-introduced cash payments for customers. Mary Street Bakery in Western Australia reversed its pandemic-era decision to go cashless after copping backlash from some customers.
Owner Paul Aron said it was “quite an expense and a bit of a pain” to accept cash but he did it to protect his staff and ensure no customers felt “alienated”.
It comes after Independent MPs Bob Katter and Andrew Gee introduced a bill that, if legislated, would fine businesses that refuse to accept or don't carry physical money.
Aussies opt for digital payments
New research by Xero revealed the majority of Aussies (86 per cent) preferred using credit or debit cards to make in-person and online payments. Despite this, the platform found there was a gap with many businesses not offering options like Google Pay, Apple Pay or even traditional credit and debit cards for customers.
Melbourne resident Jock Clydesdale is in favour of cashless payments and said he “can’t remember the last time” he used cash.
“I think the transition to a digital payment system has provided a number of benefits – convenience, not having to carry cash is a plus and it’s easier to stay on top of your finances in real-time with most payments seeming to be instant,” the 36-year-old told Yahoo Finance.
“It’s also easier to dispute transactions, a rare occasion but I had to do this recently and it was an easier process with all the information being in my banking app.”
Despite this, Clydesdale thinks it is still important for businesses to offer cash as a payment option “for a bit longer”, particularly for groups like older Aussies who tend to prefer the payment method.
He said he wasn’t worried about copping card surcharges given they were usually quite low and “not a massively impactful sum for convenience”.
Added costs for businesses
Both cash and cashless payment options present “added layers” and costs for businesses.
For cash, there can be costs associated with handling, counting and banking money. For cashless methods, there are extra merchant fees and charges to contend with.
Reserve Bank of Australia (RBA) data shows EFTPOS transactions cost an average of 30 cents for a $100 purchase, or 0.3 per cent. Mastercard and Visa debit transactions cost about 0.5 per cent, while Mastercard and Visa credit card transactions cost 0.9 per cent.
Diners and American Express cards are the most expensive networks, with average fees of around 1.3 to 1.7 per cent of the transaction value.
Rogers said accepting cash wasn't a "massive impost" on her business given they had one retail store. But merchant fees were top of mind for her as a small business, particularly at a time when they were facing higher costs including higher wages and higher costs for ingredients like chocolate and olive oil.
“So if you buy a loaf of bread, that’s a fair bit less that we are receiving. It’s proportionately not much for a large order but you notice it when it’s a small order for sure,” she said.
“It’s definitely a cost that you see as a small business but it’s literally the cost of doing business.”
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