CASHLESS STORES AND RESTAURANTS ON THE RISE

For years, small businesses have asked customers to pay cash, set credit card minimums, or added a surcharge onto card transactions, in an effort to defray the premiums imposed by companies like Mastercard and Visa. Now, an increasing number of businesses are doing the opposite. Head out of Slate’s offices for lunch and you might wind up at Dos Toros, a local burrito minichain; for coffee you might pick Devoción, a Colombian-born coffeehouse with an airy storefront. In either case, you’d be confronted with the same demand: Pay with plastic.

Stores are eliminating cash registers and coin rolls in pursuit of what they say is a safer, more streamlined payment process—and one that most of their customers want to use anyway. At Dos Toros, co-founder Leo Kremer said that more than half of the shop’s customers used cash when its first location opened in Manhattan in 2009. By the beginning of this year, that number had fallen to just 15 percent. At that point, the various hassles of dealing with cash—employee training, banking fees, armored-truck pickups, and the occasional robbery—outweighed the cost of credit card fees on those transactions. The shift wound up being more or less revenue-neutral, Kremer said, but saved a lot of time and trouble. Dos Toros’ New York locations have been fully cash-free since the winter.

Cash is still used in the majority of purchases under $10, according to research by the San Francisco Fed. But its use is falling sharply. In 2011, cash accounted for 4 in 10 purchases in the S.F. Fed’s Consumer Payment Diary. By 2016, it was down to 3 in 10. Starbucks experimented with a cashless store in Seattle earlier this year (no word on whether the pilot will expand);

But it would be hard to find anyone more gung-ho about the abolition of cash than credit card companies. Last summer, for example, Visa announced a $10,000 reward to 50 businesses that would give up cash entirely.

Pablo adds:

To read the complete article, see:
No Shirt, No Swipe, No Service (https://slate.com/business/2018/07/cashless-stores-and-restaurants-are-on-the-rise-to-the-delight-of-credit-card-companies.html)

Wayne Homren, Editor

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