The Australian Taxation Office (ATO) has published research that shows Australian consumers are more likely to trust a business if they accept electronic payment methods, rather than those requesting payment in cash-only.
The research, conducted by Colmar Brunton and commissioned by the ATO, highlighted that Australians have negative views of cash-only businesses, describing them as inconvenient and sparking concerns over the business being dishonest.
"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 ... being cash-only may have a direct impact on reputation," Assistant Commissioner Matthew 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."
The ATO said that when asked about their reactions to seeing a cash-only sign, nearly 50 percent of consumers said it was inconvenient; while nearly two-thirds of respondents believe business owners that use cash transactions pay less tax than they should and have an unfair advantage over small businesses that do pay tax on all their earnings.
Australia has one of the highest usage rates of contactless payments. Mastercard reports its PayPass "tap-and-go" functionality is used in around 80 percent of face-to-face transactions; it's a similar story where Visa is concerned, with 92 percent of in-person transactions on the Visa network utilising its PayWave service.
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Despite high use of tap-and-go, the ATO reported that over 40 percent of cash-only small business owners had never investigated electronic payment systems before.
The ATO also said that of businesses that only take electronic payments, 74 percent cited efficiency, 63 percent cited easier record keeping, and 59 percent cited security as the top benefits of not operating in cash.
Australia is a nation of small business operators -- defined by the Australian Small Business and Family Enterprise Ombudsman as a business employing less than 20 employees and by the ATO as businesses turning over below AU$10 million.
As of July 2017, 97 percent of business in Australia were small businesses employing less than 20 employees -- that is 2.1 million individuals employed by a small business.
"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," Bambrick added.
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