With the dawn of a new decade upon us, many inquisitive entrepreneurs are wondering what new trends and technology will rock the world of business. At this point it’s mostly just speculation, but among the many theories being bounced around, one in particular is making some serious waves: Cashless Businesses

Credit and debit cards already dominate the bulk of American purchases, but digital payment methods such as Apple Pay and Venmo are making purchases as easy as a tap on a screen. Those Salvation Army fundraisers you see around Christmas time even have a QR code on their collection buckets that people can scan to make a digital donation, and even some temples and shrines in Japan are starting to accept digital devotions in addition to the physical tributes people offer when they come to worship.

If you think all this convenience makes carrying around paper bills and metal coins seem a little obsolete, then you share the same mindset as Sweden, where so few of the populous carry physical currency anymore that experts and analysts regarded it as being on the precipice of becoming a cashless society.

Alternatives may be appearing like never before, and while that doesn’t necessarily mean cold hard cash is no longer king, the throne does not seem as steady as it once was. The question of whether physical currency will eventually be phased out depends on whether (or when) places of business will no longer be obliged to accept it, and some businesses have already decided to get that ball rolling. Becoming a cashless business is a major decision, and one that should not be taken lightly. While the switch has worked for some, it has failed miserably for others, which is why anyone contemplating the idea should carefully consider the pros and cons before moving forward.

Pros

Security: A lack of physical money drastically lowers the chances of theft, both from outside thieves and unscrupulous employees. What’s more, since handling bills greatly raises the odds of contacting germs and getting sick, going cashless helps keep employees and customers healthier.

Efficiency: No actual cash means businesses save time and money that would otherwise be spent checking register trays and hiring armored trucks to transport earnings to the bank. Cashless POS interfaces tend to drastically lower wait times and increase the amount of transactions per day.

Popularity: Many modern customers don’t want to be bothered with carrying change or paper receipts, they prefer being able to pay and track their spending all on their mobile devices. Advertising your business as cashless will help attract the attention of certain demographics, and give your business a modern touch.

Cons

Legality: Most areas have laws stating that legal tender must be accepted when called for to settle debts, and some areas are even making laws forbidding businesses from being purely cashless. Refusing to accept government recognized methods of payment could result in penalties for you and your business.

Inefficiency: Setting up your business to accept the various forms of digital payment methods can result in higher processing fees, while limiting your business to only a few methods of digital payment while excluding others could drive away the very customer base you’re trying to attract.

Negativity: Not everyone is willing or capable of going cashless, and excluding them could deprive you of a serious stream of revenue. The young, the elderly, low-income communities, and POC typically don’t have access to or interest in digital currency, so cutting off their means of payment can be discriminatory, even if that wasn’t your intention. The backlash from such policies could severely damage your business’s reputation, and switching back might not be enough to restore it. What’s more, going completely cashless puts a great deal of power in the hands of credit companies, who would be free to raise fees as they saw fit without competition or consequence.

As you can see, there are plenty of factors to consider before moving toward a cashless business model, to say nothing of a cashless society. It’s worth noting that, while there are several successful cashless businesses operating in the world today, several other businesses that have tried going cashless have had to revert back.

While going entirely cashless can be risky, adding incentives for digital payments while still accepting physical money could be good compromise, and may help provide the time needed for solutions to be developed that lower the risks of going cashless overall.

If you’re still on the fence, try asking yourself these questions, then review the answers and make your decision from there:

Who are your customers? What are their age group, income level, etc.?

How many cash purchases do you have compared to cashless? Are the two close, is one far more than the other, how many different varieties of cashless do you already accept? (card, apple pay, etc.)

What is the average value amount for cash purchases? Do customers predominantly use cash for small purchases, or are large transactions being paid in cash?

Why are the cash customers using cash instead of card? Is it due to preference, convenience, lack of access to cashless methods, etc.?

How likely would the cash-using customers be willing to change? Are they using cash because it’s an easy option, or do they have no other options to utilize?

Would you be willing to lose those cash-only customers? If your cash customers refused to change their ways and left you, could your business survive?

Are you prepared for the potential backlash? If your customers don’t take your new direction well, are you prepared to go back to the old model? If so, are you confident you will be able to undo the damage before it’s too late?