The cashless business model is a trend that’s developing in Malta and the rest of the world. But like every new idea, it has its supporters as well as its critics.
For example, the city of San Francisco is currently debating whether or not to ban cashless businesses entirely, as it says companies such as Amazon are discriminating against people on lower incomes who prefer to use notes and coins. Critics also argue that not everyone has a bank account, and point out the privacy ramifications of having shoppers every electronic move tracked by banks and marketing companies.
Despite the debate, cashless businesses are becoming more popular here in Malta. One business which has decided to ban notes and coins entirely is Mexican restaurant Avotaco in Ta’ Xbiex. The company – which opened its doors last August - now employees 15 people and is co-owned by Owen Galea.
Cashless restaurant Avotaco in Ta’ Xbiex
“We decided to go cashless as the benefits outweigh the negatives,” says Owen. “Not having to handle notes or coins means we can have a higher standard of hygiene. It also allows for better security in case of theft. We can be more efficient when it comes to facilitating larger groups because we don’t have to spend time counting change and it’s also easier for our staff to operate.”
Cash or card?
But has Owen or his staff had any pushback from customers? “Our regular clientele support what we do and help us spread the word by telling their friends and our new customers ahead of time, that we don’t accept cash. So far we’ve only had a few instances of criticism.”
And then there is the issue of the cost. Electronic payments can carry different charges and the lack of transparency can put some businesses off from going totally cashless. For example, some small to medium enterprises have complained that they pay two-cent on a €10 transaction, but then €4 on a €250 transaction. That’s a fee-increase of 2000 per cent. But dealing in cash also costs money when handling fees, anti-counterfeit technology as well theft are factored in. So, there is also an argument for going fully-electronic.
Owen says that while he “definitely” recommends other companies to go cashless, he says he’s disappointed there is not enough support for this business model in Malta. “There is a lack of Government incentives on the island for companies to make the change. There are also no incentives from local banks when it comes to updating technology such as their old magnetic strip cards which are in circulation. Businesses need newer terminals so they can eliminate the use of swipe for future security going forward.”