Most Australians have negative views of cash-only businesses, with consumers describing them as ‘inconvenient’ and saying it makes them wonder if the business is honest.
Detailed research commissioned by the Australian Taxation Office (ATO), revealed that nearly half of Australians surveyed feel inconvenienced when they don’t have the option to pay electronically.
Assistant Commissioner Matthew Bambrick said the research suggests cash-only businesses may be missing out.
“The real cost of cash to business seems to be twofold. Consumers are twice as likely to associate ‘cash only’ as negative rather than positive. While the majority of businesses are run by honest Australians who want to do the right thing, being cash-only may have a direct impact on reputation,” Mr Bambrick said.
“Secondly, time is money for business. Tap-and-go payments cost an average of nine cents less than cash payments, and are nearly twice as fast. This research suggests cash-only businesses take a hit to their bottom line by not offering electronic payment.”
Two thirds of respondents believed that cash-only small businesses are likely to be paying less tax than they should, regardless of whether this is true.
The report also revealed that over 40% of cash-only small business owners have never investigated electronic payment systems before.
“While cash is legal tender and we know that some businesses may be used to dealing only in cash, this research suggests that business owners may want to think about the benefits electronic payments can bring and consider what might work best for them,” Mr Bambrick said.
“On the other end of the spectrum, businesses that only accept electronic payments cited efficiency, better record keeping and security as the top benefits of not operating in cash.
“As well as the benefits to reputation and potential cost savings, electronic payment methods make it easier for businesses to keep good records and get their tax and super obligations right,” Mr Bambrick said.
“Business owners who don’t declare their income correctly may not be able to identify their true earnings, and may have difficulty obtaining lines of credit.
“They also won’t get an accurate result against the ATO’s small business benchmarks, which are useful to help businesses compare themselves against their competitors and similar businesses in their industry.”
This story was first published in The Fence magazine.