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 locations when he first opened 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 helps customers as it 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 aligns faster service with better customer experience.
He says it’s too soon in his new endeavour to know just how much expediency will be gained, 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 doing archaic tasks such as counting paper throughout the day to more productive undertakings like coaching team members.
READ: Report says Canadians are borrowing more – but on fewer cards
“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 Food, the reception to their cashless payment systems has been mostly positive so far.
The stereotype may be that older generations are technology laggards, but Segal says the tween demographic – where kids may only receive spending money from parents as opposed to their own bank accounts presents the only challenge. But Mad Radish is currently working on a solution, like a reloadable gift card, he says.
Bekerman says he has only heard of a few instances of consumer grumblings when his company first made the switch to digital payments. The complainants included an executive assistant whose boss handed over cash to pay for lunch and a few folks who solely used cash or Bitcoin due to privacy concerns.
Consumers, in part, may be 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.
Like us on Facebook and follow us on Twitter.
The escalation comes as digital wallets gain a foothold in Canadians’ smartphones. Google’s Android Pay launched in the country at the end of May, while Apple Pay has been available now for more than a year.
The increasing availability of these types of methods will significantly increase non-cash payments in the long run, Brown says.
Last year, the company predicted cash purchases will compose only one-tenth of all money spent in Canada by 2030, and she says the firm remains confident that will be the case as both consumers and businesses begin to prefer the convenience of digital payments.
The growth in tap-and-pay cards and digital wallets “is absolutely cannibalizing cash transactions.”
