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Luke Shaff
Imagine having a $50 banknote in your pocket and using it to pay for dinner at a restaurant. The restaurant owner, in turn, uses that same bill to pay for laundry services, and the cycle continues as the laundry owner uses it to pay the barber, and so on. Throughout this chain of transactions, the $50 remains intact and serves its purpose for everyone involved without incurring any additional costs for anyone, including the bank.
However, if you choose to pay digitally with a card, the seller incurs a transaction fee of 3%, which amounts to around $1.50 in this case. Similarly, for each subsequent payment made by the laundry owner or the barber, the fee is applied again, leading to a continuous reduction in the initial $50.
As a result, after just 30 digital transactions, the original $50 is reduced to only $5, with the remaining $45 being taken as fees by the bank. This constant loss can be detrimental to small businesses that heavily rely on digital transactions, and it significantly impacts their overall income.
By using cash for your purchases instead of tapping cards or using credit, you can help small businesses tremendously. One way to do this is by withdrawing smaller amounts of cash and using it for your everyday expenses. This simple change can make a significant difference for small business owners, allowing them to retain more of their earnings and better support their families.
Consider the perspective of retailers who face 3% fees per transaction through their point-of-sale (POS) machines. If, for example, they make $50,000 in sales with 90% of transactions being card-based, they would be paying $1,500 in fees in just one month. Over the course of a year, this would accumulate to $18,000, which directly impacts their monthly income.
Supporting small businesses by choosing cash over digital payments can go a long way in helping them thrive and provide for their families. It's a small but impactful step we can all take to contribute to the success of local businesses and our communities as a whole.
Save your airline mileage credit cards when purchasing from larger corportations!
