Do you have any cash on you right now? These days, the answer to that question is most often “No.” I personally tend to pay mostly by debit card, and I only make a trip to the ATM when I know cash will be necessary.
At one Starbucks location in Seattle, the coffee chain is testing the concept of a completely cashless store. As paying by card becomes more popular, the company is interested in learning how removing the option of paying by cash may affect customer behavior and experience.
In 2015, Starbucks introduced mobile ordering and payment, which seemed to be a jumping-off point for eventually getting away from cash. Using the company’s mobile app, customers can put money into their account, place orders in advance and to pay at the counter simply using their phone. And the ubiquity of systems like Apple Pay and Android Pay continue to make cash seem like an afterthought.
“Thirty percent of our payments in the United States [are] done with a mobile phone,” Starbucks CEO Kevin Johnson said during an appearance on CNBC’s “Squawk the Street.” “Over 40 percent is done with phones and Star Value cards with rewards. In China, over 60 percent of our tenders come from mobile payments.”
Jonathan Zhang, a professor of marketing at the University of Washington’s Foster School of Business says going cashless could result in a number of benefits for Starbucks. “They need to keep change in the registers, it slows things down, it creates issues of hygiene because money is dirty. They need to go to the bank and deposit it,” Zhang explained to Seattle Times. Because eliminating a cash option would shave time off a typical transaction, it could spell greater profits in the end for the company as well.
Starbucks is far from the only business experimenting with doing away with cash. Visa is encouraging businesses to go cashless by giving 50 small restaurants $50,000 each to eliminate cash transactions.
Only time will tell if the cashless trend will catch on and become more commonplace. What do you think? Are you fine with forgoing the green stuff, or do you prefer a little cold, hard cash in your wallet?