Cashing In at the Cash Wrap


For every two customers who pull out their credit card to shop online or pay a bill, there is another one who relies strictly on cash. Even with the advent of online shopping and widespread availability of credit and debit cards, cash still accounts for more than 30 percent of all transactions.

Roughly 68 million Americans are cash-based consumers. For some, paying in cash is simply a preference. Of all the Americans who have bank accounts, 82 percent are uncomfortable providing their financial information online. Shoppers still don’t trust online portals to keep it safe. Additionally, recent revelations about government surveillance have many Americans looking to stay under the radar wherever they can.

For others, paying with cash is a necessity. Nearly one-quarter of American households lack both a credit card and a debit card. Additionally, one-quarter of the U.S. population doesn’t have a bank relationship. For these customers, shopping online is nearly impossible and paying bills is a nightmare. Without a credit card or bank account, it’s difficult for many Americans to pay for basic necessities such as utilities and rent.

The challenges faced by cash-based consumers have a ripple effect out onto service providers. Ecommerce stores are missing out on revenue from those 68 million cash-paying customers. Utility providers are forced to hunt down customers who pay late. Most systems for cash-based consumers are inflexible and tricky to navigate. The old process for billers to build up a payment network involves building relationships with partners — and it can take years.

Fortunately, new technology is changing the game for the cash economy, and convenience store operators and grocery stores are among the biggest beneficiaries.


Here’s how the new cash payment technology works. First, customers receive a bill from any number of service providers, ranging from utilities to wireless providers to ecommerce companies, and beyond. In fact, there are more than 18,000 billers accepting payments via point-of-sale (POS) cash payment technology.

The bill sent to customers arrives with a bar code on it. Alternatively, consumers can choose to display the bar code on their phone by accessing a retailer-branded mobile app. The consumer brings the bar code to a retailer that has enabled the POS cash payment technology.

At the POS, the cashier scans the bar code on the customer’s bill or mobile phone and the consumer pays the amount in cash. And then, voila, the transaction is complete and the biller receives notification immediately.


It’s so rare that a new technology is easy to implement and truly beneficial, but cash payment technology is one of those rare breeds. For starters, it’s easy for retailers to deploy technology that allows this type of transaction at the POS. In fact, no integration is required and it only takes writing a few lines of code on the biller’s end to get up and running.

The lasting benefits for retailers come from an increase in foot traffic. Like all consumers, cash-paying customers want to avoid late payments. To avoid them, they visit stores to make payments regularly.

The 68 million cash-based consumers have about 10 bills to pay each month, which is a lot of regular traffic that retailers can bring into their stores. The benefit of more traffic is, of course, greater revenue. Retailers have long known that customers who come in to a store to buy one item often leave with a few. Retailers can expect that customers who come in to pay their bills will also do some shopping.

What’s more, because billers want to promote on-time payments, they promote participating retailers as payment outlets to their customers. This promotion keeps stores at the top of shoppers’ minds as they plan their errands for the week. And when customers plan to shop at the same stores where they pay their bills, retailers can experience an even greater uptick in revenue.

In addition to foot traffic, another huge benefit for retailers is the time and cost savings experienced when cash payment technology is implemented.

Processing cash payments is a time-consuming process for the cashier, who must read and understand the bill while a line forms behind the customer. As that line forms, many customers with high-ticket transactions may grow frustrated and leave, which drags down the store’s bottom line.

By enabling cash payment technology, clerks can scan bills as easily as they would scan an item for purchase. The line moves along smoothly, and high-paying customers don’t get frustrated and step out of line.


For unbanked customers, not only does the time-consuming nature of the cash-based bill paying process interfere with their schedules and lives, but conventional bill paying methods also intrude on consumer privacy. Cash-wrap payment technology gives privacy back to the cash-based consumer.

At the end of the month, a majority of underbanked consumers visit bill pay centers or retail service desks to pay their bills. Not only do long lines make the payment process time-consuming, but these transactions also put the bill payers’ finances on full display.

Any time a customer needs to make or discuss a late payment with the clerk, customers waiting in line behind them can hear every personal detail. Too often, the customer must rehash personal information in order to complete the transaction — in front of the clerk and other customers.

New cash payment technology eliminates this privacy invasion. Because the bar codes on bills can be scanned and paid by the regular cashier like any other item, customers don’t have to deal with the stigma of waiting at a payment center or service desk. What’s more, the bar code is a completely anonymous payment trigger. The cashier doesn’t need to ask for any personal details or discuss any late payments. They simply scan the bar code and accept payment.

For a customer segment that’s underserved and undervalued, cash payment technology helps restore dignity.


For many convenience store operators, it sounds too good to be true. At least one area for concern might be that customers will come in on the 1st and 15th of the month to pay their bills and clog up the line. Store operators don’t want to see long lines of empty-handed customers, especially if the line is turning away customers with larger purchases.

Fortunately for retailers, these fears rarely manifest. Not only do customers who come in to pay bills end up spending money on other items, but the transaction is so simple that it doesn’t take up excess time. The cashier simply scans the billing bar code like they would scan any other item.

In the rare event that customers don’t purchase any additional items, retailers aren’t stuck with a raw deal. For every transaction, retailers can earn a 50-cent convenience fee for providing the service. And with 68 million customers with 10 bills to pay each month, those fees can add up to some serious revenue.

The most compelling case for implementing cash payment technology at the POS is that it enables stores to offer a more complete customer experience. Supermarkets learned long ago that offering banking and pharmacy services to customers made it more likely that customers would view their store as a “one-stop shop.” The supermarket simplified errands for customers and cultivated loyalty as a result.

Now, convenience store operators have the opportunity to build the same type of loyal customer base by empowering cash-based consumers to pay bills in their store as easily as completing any other transaction.

Editor's note: The opinions expressed in this column are the author's and do not necessarily reflect the views of Convenience Store News.

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