Cash is Still King: What Small Businesses Need to Know About Going Cashless

Are you thinking of making your business cashless? There are benefits to going cashless – such as simplified bookkeeping and reporting, faster transactions and better hygiene.  

Keeping up with consumer trends is also important. More and more people find digital transactions fast, simple and easy. But there is evidence to suggest that people are not ready to give up on cash just yet and still want the option to pay with physical currency.  

Consumers still believe cash is king 

A new survey from money.com.au has found that, despite the rise of digital payments, Aussie shoppers still want the right to pay with cash. 68% of respondents to the survey said that they believe all businesses should be required to accept cash, and a further 14% say essential services (such as supermarkets, pharmacies and petrol stations) should at least continue accepting cash.  

Only 5% of Aussies surveyed said they support a “no cash” policy. 

Are card fees to blame? 

According to the survey, 39% of people said that in-store debit and credit card fees were the most hated type of fee. In comparison, ATM withdrawal fees only raised the ire of 14% of people. Using cash is one way for customers to dodge those debit and credit card fees. 

Of course, many small businesses feel they have no option but to charge card fees, given that merchant fees are frequently incurred each time a customer uses a card to pay. This is especially true for any cards that offer significant rewards for consumers.  

But is it card fees that are driving people to use cash? With such a large number of people agreeing that they are the most hated type of fees, the evidence seems to point this way. But it should also be noted that different generations have various opinions on cash. Boomers are the most likely to say all businesses should accept cash (83%), followed by Gen X (71%). On the flip side, 25% of Gen Z people surveyed believe that businesses should have the right to accept or reject cash. 

So, where does this leave small businesses when it comes to accepting different methods of payment?

Why businesses should consider multiple payment options 

Ecommerce research from PayPal suggests that payment preferences matter for customers, no matter what their preferred method of payment is.  

When it comes to online shopping, 70% of Australians abandon their cart before making payment. The biggest reasons are security (41%) followed by no preferred payment method (36%). Whereas the number one reason to complete a payment online was because the preferred payment was available (59%).  

While the PayPal survey is focused on ecommerce, it clearly shows that if the preferred payment method is not available, then your potential customers will simply shop elsewhere. This could be true also for bricks and mortar stores.  

Mandatory cash laws are coming 

One of the biggest reasons to continue accepting cash is that mandatory cash laws are coming into effect in 2026. The proposed new cash mandate laws would require certain businesses to accept cash as payment for groceries, fuel and other items deemed essential. 

Cash is legal tender in Australia. However, there is no law that states a business must accept cash as payment. Businesses are free to choose which kind pf payment methods they accept, which includes going cashless.  

This new initiative from the Australian Government aims to ensure that Australians who rely on physical currency are not excluded from making everyday purchases.  

Learn more about the mandatory cash laws and whether your business may be affected. 

The cons of not having cash as a payment option 

Other than mandatory cash laws, consider some of these points first before going cashless. Offering only electronic payments could: 

• Alienate cash-preferred customers: Some customers, particularly older Australians or those without easy access to banking, still prefer to use cash. Going cashless could turn them away. 
• Exclude vulnerable or unbanked individuals: Not everyone has access to debit or credit cards. People experiencing financial hardship or homelessness may rely on cash. 
• Create problems during outages: Everyone – small business owners and customers alike – has been in this situation before. Power failures, EFTPOS malfunctions or internet dropouts can leave a business unable to process digital payments and therefore unable to make sales. 
• Lead to increased operating costs: Card transaction fees and surcharges from banks or payment processors can eat into your margins over time, unless you pass them on to your customers. And this could cause friction. 
• Trigger customer frustration: If a customer only has cash and your business refuses it, it could lead to negative reviews, lost trust or a missed sale.

Are there downsides to accepting cash? 

Accepting cash can help you stay connected to a wider range of customers and provide overall better customer service. However, just like any other payment method, there are some challenges and risks. 

The most obvious risk is theft, both external and internal. Businesses with visible tills or frequent cash handling may become a target for opportunistic criminals. There’s also the chance of human error – miscounting, misplaced funds or unbalanced cash registers at the end of the day can all impact your bottom line. 

On top of this, the manual nature of managing physical money takes time and effort, whether it’s reconciling end-of-day takings, storing cash securely or training staff in proper handling procedures. 

Protecting your business from risks 

If you’re handling cash regularly, what kind of measures do you have in place to protect your business? 

Basic steps like staff training, secure safes and clear cash handling procedures are all essential ways to help protect your business. But if the worst should happen, there’s Money insurance.  

Money insurance covers you in the event business money (cash, cheques, money orders and even things like lottery tickets) is stolen, lost or damaged while on your premises, in transit or temporarily stored in a private residence. 

If your business holds large sums of money on the premises, or you necessarily transport cash between your business and another location, then you may wish to consider Money insurance. 

Money insurance is available as part of a Business Insurance Package, which is a customisable insurance pack that allows you to pick and choose the insurance that suits your needs. This could include Money insurance as well as Public Liability, Building, Contents, Theft or Portable Equipment insurance – just to list a few.  

OK, so what’s the verdict on cash? 

Whether you choose to go fully digital or keep accepting physical currency, the key takeaway is this: flexibility matters. While digital payments continue to grow in popularity, many Australians still want the option to pay with cash. Ignoring that preference could mean lost sales or unhappy customers. 

For small business owners, it’s all about finding the right balance between convenience, cost and customer service. And if you’re handling cash, don’t forget to protect it.  

BizCover is here to support small businesses. In fact, we’ve been providing business insurance solutions to Aussie small business owners since 2008. Get a quick and easy quote today and see how much you could save. For on the go cover, go BizCover.

This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording. 

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