Digital absolutely cannibalizing cash as stores shoppers snub bills
VANCOUVER — Over the next year and a half, Alan Bekerman plans to grow his healthy fast-food chain iQ Food Co. from five to up to 11 locations and not a single one will accept cash.“It was one less thing that we had to think about, which is a huge benefit,” says Bekerman, who tested the idea at two restaurants when he first opened them in February 2016 before expanding the pilot to all five of his Toronto eateries earlier this year.He’s one of a growing number of retailers who believe shunning cash speeds up service and frees up staff to focus on less mundane tasks.It’s a choice some in the industry say is likely to become more commonplace as tap-and-pay cards and digital wallets increasingly replace bills and coins, saving merchants and customers precious time by not having to fumble with cash at the queue.It’s something DavidsTea co-founder David Segal is banking on after recently opening the doors to his Mad Radish restaurant venture, where he has a no-cash policy in place at both Ottawa locations.“I just feel like the benefits are enormous and so why not try it?” says Segal, who equates faster service with better customer experience.He says it’s too soon to say how much faster service will be, but he believes tap-and-pay methods will always be more efficient than cash exchanges.For Bekerman, the switch to cashless transactions has freed up his restaurant managers from counting money to more productive tasks like coaching staff.“The highest paid folks in the restaurants can actually spend that time doing things that we thought were a lot more meaningful,” he says.For both Mad Radish and iQ, the reception to their cashless payment systems has been mostly positive.Some may think that older generations would be more reticent to adapt. But Segal says it’s actually tweens, who may not have their own bank accounts and whose only source of cash may be spending money from their parents, that present the only challenge. Mad Radish is working on a solution, such as a reloadable gift card, he says.Bekerman says he has only heard of a few instances where customers grumbled after his company made the switch to digital payments. The complaints included one from an executive assistant whose boss handed over cash to pay for lunch, and others from a few people who only use cash or Bitcoin due to privacy concerns.Consumers, in part, are driving the trend toward digital-only payments.“Cash is significantly down as a preferred payment device,” says Angela Brown, CEO of Moneris Solutions.In the second quarter of 2017, 39.5 per cent of payment transactions used tap-and-pay methods, according to data from the debit and credit payment processor. That’s up from 30.86 per cent the year before.Moneris predicts that figure will jump to 50 per cent by the end of the year.The rise comes as digital wallets become increasingly available on smartphones. Google’s Android Pay launched in the country at the end of May and Apple Pay has been available for more than a year.Last year, Moneris Solutions predicted cash purchases will compose only one-tenth of all money spent in Canada by 2030, and Brown says the firm remains confident that will be the case as both consumers and businesses embrace the convenience of digital payments.The growth in tap-and-pay cards and digital wallets “is absolutely cannibalizing cash transactions,” she said.Follow @AleksSagan on Twitter.