Cash only businesses are rare thanks to advanced technology.
A discussion of credit vs. cash businesses relates to the forms in which small businesses receive payment for goods and services. Cash only businesses usually accept cash or check, but not credit cards.
Basics
Cash only businesses were more common in the U.S. until technology advanced to a point where accepting credit cards became simple. Now customers widely expect to be able to buy on credit. Though some cash only establishments still exist, most businesses now accept cash or credit payments.
Why Cash Only
Cash is the simplest form of payment and the most immediate for the business. You have money in hand at the point of purchase. Less bookkeeping and reduced potential for fraud make cash less stressful. Additionally, third party processor fees on credit card payments are a business expense and directly impact net profit.
Why Credit
Many banks are less likely to offer loans to cash only businesses because of the multitude of cases involving money laundering and misappropriations with cash, according to the Dallas Business Journal website. Customers generally expect to have credit card payment as an option and often carry little to no cash, according to Business.gov. Companies that do not accept credit risk turning away and alienating customers. As of 2010, most fast food restaurants accept credit cards, as the convenience to customers justified the card transaction fees paid on small purchases.
