Research conducted by Colmar Brunton, commissioned by the ATO, found that almost half of Australian consumers are inconvenienced by businesses that do not accept electronic payments.
Even more (around two-thirds) suggested businesses that do rely solely on cash are likely to be dodging their tax liabilities – regardless of whether or not this is true – suggesting that reputational damage can also arise in addition to lost sales.
“The real cost of cash to business seems to be twofold. Consumers are twice as likely to associate ‘cash only’ as negative rather than positive. While the majority of businesses are run by honest Australians who want to do the right thing, being cash-only may have a direct impact on reputation,” said Matthew Bambrick, the ATO’s assistant commissioner.
“Secondly, time is money for business. Tap-and-go payments cost an average of nine cents less than cash payments, and are nearly twice as fast. This research suggests cash-only businesses take a hit to their bottom line by not offering electronic payment.”
Mr Bambrick added: “While cash is legal tender and we know that some businesses may be used to dealing only in cash, this research suggests that business owners may want to think about the benefits electronic payments can bring and consider what might work best for them.”
Surprisingly, the research found that of the businesses polled that are cash-only, 42 per cent have “never” investigated the use of electronic payments, while 20 per cent cited the cost of electronic payments as their reason for maintaining cash-only payments.
However, the ATO did not include a sample size for the poll, nor did it reveal the full research. A request has been made for both to be provided.
Last month, the tax office released separate research that suggested only one in five shoppers continue to use cash to make purchases.
It comes as the government is attempting to crack down on tax dodgers and the black economy, including a proposal to limit all cash transactions to a maximum of $10,000.