7 Reasons Why Cash is Better Than Card

Do you know why cash is better than card? If you are in the ATM business, then you probably have your reasons, the number one reason being revenue…. But with the advancements in electronic payment technology, money transfer apps, and cryptocurrency, some might start to wonder whether cash will become obsolete.

We’re here to tell you that cash is here to stay. Not only are there a number of situations and scenarios where cash is the only possible form of payment, there are also clear benefits of using cash instead of a debit or credit card.

Trust us. Cash is king. Here are 7 reasons why cash is better than card.

1. Minimize Debt

As you probably already know, credit is a quick way to accumulate debt. It’s the very nature of credit: buy now, pay later. Charging more than what you have or what you make results in debt. And it’s a very easy habit to develop. When you pay with cash, however, you own rather than owe. 

Paying with cash has also been proven to help with budgeting. Budgeting, in turn, prevents debt. Budgeting ensures that you only spend what is available. Therefore, budgeting is made easier with cash payments. You see and feel the money leave your pocket. When it’s gone, it’s gone. 

A budget is much harder to maintain when the debit or charge is so far removed. Ever heard the phrase, “Out of sight, out of mind”? Unfortunately, for many people that’s what happens when they pay with their cards. And this is what makes budgeting so much more difficult.

2. Avoid Interest

Then, as though charging more than what you have or can afford wasn’t enough to burst your budget, you accrue interest on your card payments. In this way, you end up paying more for your purchases when you pay with a card than if you had paid with cash. 

Of course, you don’t accrue interest if you pay the balance each month. But many people occasionally miss payments. Not only do you end up paying more in interest and late fees, but your credit score could be at risk, too. With more cash payments, these problems become less of a concern.

3. Avoid Overdraft Fees

While it might seem clear or even obvious why cash is better than card when it comes to credit, it does have its place above debit as well. First of all, the same “Out of sight, out of mind” maxim applies. It is much harder to stick to a budget when you don’t actually see or feel the funds leave your wallet. 

Second, your debit payments don’t accrue interest, but have you ever miscalculated your balance and been charged an overdraft fee? There’s $20 you’ll never see again…. Alternatively, depending on your bank, you can only get cash if your available balance will support it. 

Once you have the cash, you can spend it until it’s gone without suffering overdraft penalties! You always know how much you have at any given time without the confusion of “pending” transactions, “available” balance, or delayed processing.

Unless you want to keep a register, like we did when checks were more commonplace (Does anyone miss checkbooks?), it might be best to use cash as much as possible rather than rely on debit transactions. Especially if you are trying to maintain a strict budget and decrease your debt.

4. Avoid Transaction Fees

Did you know that it costs money to process card transactions? Yes, there are network fees charged by your card company to process, or allow, your transactions. 

Many businesses adjust the cost of their goods and services to account for the amount these fees will cost them to process card payments. But there are some businesses (typically small businesses, pop-up shops, freelancers, etc.) that pass this fee on to the consumer. And some restaurants pass this cost onto their servers and deduct card transaction fees from their tips!

Maybe a 3% payment transaction fee doesn’t discourage you from the convenience of making an electronic payment rather than a cash payment. But think of it this way:

You use a card to pay for a $50 restaurant tab. That $50 is now worth only $48.50 when you subtract the transaction fee. Whereas if you pay for your meal with a $50 bill, that $50 bill retains its value whether it’s used for groceries, a haircut, or a movie by the next person.

So after, say, thirty card transactions, that $50 will end up being only $5. The other $45 becomes property of the bank after all of the digital transaction fees are paid….  Is that where you want your money to go? 

5. Spend Less

Psychologically, we spend less when we use cash instead of card. It doesn’t “hurt” as much when we spend without our means if we don’t immediately experience the effects. In other words, the option and/or ability to postpone the consequences of our spending money we don’t currently have results in overspending. 

For this same reason, you are more likely to encounter deals when you are able to pay in cash. Individuals, small businesses, and, well, basically anyone, prefer cash payments to electronic payments. 

First of all, they don’t have to worry about missed payments. Sometimes it’s more important to a seller that they get full payment immediately than have to deal with defaulted or delayed payments. 

Secondly, when someone receives a cash payment, again, they benefit from the entire value of the banknote. The alternative is either having to deduct a percent of a card payment or risk missed payments. Therefore, since most people would rather have the security of full payment up front, they are more likely to offer you a sale for less than the ticket price if you have cash.

Often the “ticket price” accounts for the cost of waiting for a fulfilled payment and any associated fees. So when you pay with cash, you not only avoid paying interest, but you might also benefit from paying less up front due to the convenience afforded to the seller. 

6. Decrease Risk of Identity Theft

Have you ever received an email saying your information was compromised in a data breach? When you swipe your card, credit or debit, you put yourself at risk of being robbed. 

When you swipe your card or use it online, your card data can become compromised if there is a lapse in security. This risk applies to money transfer apps tied to your accounts as well. 

On the other hand, there is no paper trail with cash. So when you make cash payments, your personal information remains secure no matter what.

7. Pay for Almost Anything

Finally, cash is universal. You tip your server, bartender, barber, or manicurist in cash. You give a dollar or two to the beggar on the corner. Your kids get their allowance in cash. You pay your young neighbor in cash to babysit. The local farmer’s market or pop-up exchanges goods for cash. 

Most cannabis dispensaries are cash only still, too. And with the recent change in money transfer app taxable income reporting, you might start to find even more freelancers, independent contractors, and other self-employed individuals encouraging cash payments. 

Cash is almost always accepted. You will find more “Cash Only” signs than you will “Card Only” signs. Since cash retains its value while the bank shares in electronic transactions, some businesses just don’t want to pay those transaction fees. And what happens when “the system is down”? You pay with good old fashioned cash!

Most importantly, everyone has access to cash. Minors, low-income, and other unbanked individuals would find it quite difficult to fit into a cashless society. Cash is non-discriminatory and is absolutely necessary in today’s world.

Why Cash is Better Than Card

Now, we know that alternative payment methods definitely have their place. But we also know that because of the benefits cash offers, it won’t become obsolete anytime soon. 

Cash is traditional and familiar. It’s reliable. It’s universal. And it’s better than plastic.

Now that you know why cash is better than card, are you convinced that an ATM business is a solid investment? Contact us to get started today!

9 New Year Business Quotes for ATM Business Owners

New Year business quotes function much the same way as any other motivational quote you might have seen in your lifetime. The difference is that these quotes can be directly applied to business owners.

The beginning of a new year is inherently motivational for most people. It signifies a fresh start, a second chance, and new opportunities. This applies to us personally as well as professionally. As a business owner, entrepreneur, or self-starter, do you feel more motivated with the arrival of the new year?

If you need a little more motivation or inspiration, here are 9 New Year business quotes to help you achieve business success this year.

1. “Another day, a whole ‘nother set of possibilities.” -MacGyver

We like this New Year business quote because it doesn’t just apply to a new year. You can apply this one to any day. A new year, a new quarter, a new month, a new day…. All signify opportunities to achieve more. 

What are your goals for this year? What are your goals for this month? For today? And those are just the possibilities you’ve listed for yourself. Those don’t even account for the opportunities that will come your way that you might not even expect. Will you take advantage of those opportunities? 

Angus “Mac” MacGyver is famous for his unconventional problem solving skills. Will you be defeated by any problems this year brings, or will you welcome them as possibilities and opportunities? 

2. “Cheers to a new year and another chance for us to get it right.” -Oprah Winfrey

“Cheers” is right! Hopefully you welcome the new year rather than dread it. You should celebrate an end to the previous year, a year surely filled with mistakes that you have since learned from. Take comfort in knowing that this year offers you a fresh start, a clean slate, a chance to put into action everything that you learned from last year.

Although it may seem that Oprah gets everything right all of the time, that is far from the case. And if she needs another chance to get it right, cut yourself some slack and try, try again.

3. “There are far better things ahead than any we leave behind.” -C.S. Lewis

C.S. Lewis is a writer known for The Lion, the Witch, and the Wardrobe and The Chronicles of Narnia. As a fiction writer, he knew a thing or two about possibilities. You, too, are a writer. Although Lewis’s famous works contain fantastical elements, you have the chance to write your own story. 

What does the new year hold for you? What are you manifesting or working toward? No matter how successful (or disappointing) last year was, you now have the chance to make this year even better. The pen is in your hand. 

4. “A person can succeed at almost anything for which they have unlimited enthusiasm.” -Charles M. Schwab

Sure, easy for Charles M. Schwab to say, a man who accumulated a fortune of around $200,000,000 in his lifetime. Nonetheless, there is truth to what he says. Everyone measures success differently. Success looks different for each individual and for each business. However, if you love what you do, find joy in your work, and are genuinely enthusiastic, there is no doubt that success will follow.

5. “Work smarter not harder.” -Allen F. Morgenstern

We know, we know. You’ve heard this one before. But did you know that it dates back to the 1930s? Allen F. Morgenstern, an engineer, coined the term during a work simplification program with the intent of increasing peoples’ ability to produce more with less effort. 

Now, there is some controversy about this particular new year business quote. So allow us to clarify why we’ve included it here:

First of all, it doesn’t mean you should work yourself to the bone. It doesn’t mean you shouldn’t ask for help. It doesn’t mean you should already have all of the answers. Quite the opposite.

Working smarter, not harder, in the context of your ATM business, means you should rely on those who have more experience in the industry. Ask questions. Ask for help. And plan ahead.

Working smarter also means you should prepare for any and all potential threats to your business. By this we mean ATM security. What potential threats, problems, malfunctions can you prevent this year that will save you time and money resolving in the worst case scenario? 

With the appropriate processes and procedures in place this year, you can ensure more revenue with less effort this year. Just like Morgenstern taught us.

6. “Do more than is required of you.” -General George S. Patton

Does anyone really succeed by doing the bare minimum? General George S. Patton didn’t. One of the most famous American military commanders during World War II, General George S. Patton was known as “Old Blood and Guts” and was awarded a Distinguished Service Medal and the Purple Heart.

General George S. Patton went above and beyond his duty and was revered and respected for doing so. This is what is necessary to make a name for yourself. If you’ve “gotten by” in the past, this year, try to do more than is required of you and see if you notice a difference in your business (and your life!).

7. “Creativity is intelligence having fun.” -Albert Einstein

Once you have some experience in the ATM industry under your belt, you can start to get creative. Experiment with your surcharge. Will a lower surcharge bring in more customers and therefore more revenue? Or is your traffic mostly local regulars where a higher surcharge brings you more consistent income?

What about advertising? Is there anything you can do to draw more attention to your ATM machine or business? Are there any extra features you’d like to add to your ATM machine this year to set your business apart from the competition?

Can you get creative with opportunities in the ATM industry? Maybe you want to start selling ATM machines to locations or get into cryptocurrency ATMs

You don’t have to be a genius like Albert Einstein to be successful. Once you have a little more experience, or intelligence, about the ATM industry, you can start to get creative and have a little more fun with your business.

8. “If you want something new, you have to stop doing something old.” -Peter F. Drucker

This New Year business quote from Peter F. Drucker, management consultant, reminds us of another: Insanity is doing the same thing over and over again and expecting different results. Do you want to make more revenue? Do you want to scale your business? Are you unhappy in your current position? Would you prefer to work out of a different location?

If there is any aspect of your business that makes you unhappy or uncomfortable, it’s time to make a change. Whatever it is you are doing now that isn’t working needs to stop. 

“Something new” could refer to something material: If you want a new car, you might have to make more revenue. Okay, so what changes could you make to your business that might generate more income?

Or, “something new” could refer to a state: If you want to feel less stressed in your business, you might need to consider a different business model. Is there an aspect of your business you’d like to focus more on? Are there parts you could outsource, maybe parts you dread or don’t really have time for? 

Every ATM business looks different. There is no one way to do it. What do you want yours to look like this year?

9. “A business absolutely devoted to service will have only one worry about profits: they will be embarrassingly large.” -Henry Ford

Henry Ford knew a thing or two about service and profits. His service made him a household name, and he would have been worth about $200 billion today.

Now, your ATM business operates on a much smaller scale than Ford Motor Company, but what is one surefire way to ensure you keep generating profit? Focus your energy and attention on the customer. 

Great ATM customer service goes a long way. Customers are loyal to businesses that listen to them and know them. What do the customers in your area need? What surcharge is convenient for them? Are they able to contact you? How quickly do you address machine issues?

You don’t have a business if you don’t have operating machines. And you don’t have income if you don’t have customers. So focus on them this year.

What Can New Year Business Quotes Do For You?

If you struggle to get motivated or stay motivated, these quotes might just help. Take it from the experts, from business owners, entrepreneurs, and self-starters just like you. They’ve been where you are, they know what it takes. And so do we.If you need help getting started, scaling your business, or exploring other opportunities in the ATM industry, don’t hesitate to contact us here at ATMDepot.com. We can help you reach your business goals this year.

7 ATM Business New Year Resolutions

Business new year resolutions. Have you heard of it? Sure, we have our personal ones. But why not treat your business with the same respect? Business new year resolutions are a good way to assess the state of your business and make the most of the upcoming year.

Curious to know where to start? Feel like you’ve already got a good thing going? Check out these 7 ATM business new year resolutions just to make sure. 

1. Make Financial Projections

Making financial projections is an important part of any business. An ATM business is no different. Reviewing each year’s finances sets you up for success in the upcoming years. It allows you to make relevant decisions for your business and set realistic goals.

For example, you want to consider your cash needs. Did you have enough this year to run your business? Will you need more next year? Less? 

Additionally, consider your revenue goals for next year. Did you hit your revenue goals this year? If you didn’t, what do you need to adjust?

Finally, what expenses do you predict for the upcoming year? Are you prepared to cover them?

Making financial projections allows you to make strategic decisions and have clear expectations for the year ahead.

2. Plan Strategically

Once you have your financial projections in place, what’s your plan for implementation? What will you do to reach your goals? If you want to scale your business, you might consider investing in more machines or building some relationships with location owners. 

If you want to increase revenue, you might want to revisit your surcharge fee. Is it still competitive? Is it still reasonable for your customer-base? Spending and market trends change all of the time. So make sure your surcharge continues to match your target audience’s needs to bring in as many transactions as you can.

Maybe there are more opportunities in the business that you might be interested in. Do you want to outsource vaulting? Or start vaulting yourself? Do you want to try a new role in the ATM business? You could switch from independent ATM deployer (IAD) to ATM seller. Or maybe you want to do both!

You might also think about developments in the market. Cryptocurrency and cannabis might present new business opportunities for you this year. And maybe you want to explore other businesses in your area that are experiencing a high cash need. What new businesses started in your town recently that you could approach?

All of these are factors you should consider for the new year. This is the best time of year to be thinking about your ATM business new year resolutions that set you up for a lucrative upcoming year.

3. Market Yourself

If you decide that you do want to scale your business or make more revenue or explore some new opportunities this new year, you might need to do some marketing. If you haven’t done so yet, you might start on social media. Create a business page or account and advertise the service(s) you offer and the pain points your business helps solve. 

You can do the same on ATM business fliers and business cards. ATM business fliers are great ways to leave behind information for location owners who don’t have time for a meeting with you or who want time to think about an offer. ATM business cards are handy when unexpected opportunities come your way. Keep some on you for when people inquire about your business!

And, depending on the size of your business, you might consider creating a website. What people do you want to reach, and what is the most accessible way for them to find you? If your marketing could use improvements, make this one of your ATM business new year resolutions!

4. Use More Technology

It’s never too late to start using more technology. So often it makes our lives easier—and our businesses. Think about your current ATM equipment. Is it becoming outdated? Do you need to invest in newer machines? This could prevent you having to worry about repairs or unexpectedly being out of order. However, newer, shinier machines bring in more traffic than older, dingy machines. 

There are other things you can do, though, to improve an older machine without springing for a new one. You might add new and improved features or improve existing ones. For example, you could add a topper to your machine that displays relevant messages to patrons. Toppers also draw users’ attention which means more business for you!

You could also upgrade your keyboard to one that is lighted. This is visually pleasing to customers and helps them conduct their transactions in dimly lit locations like bars and restaurants. Screens can be upgraded, too. Bigger ones draw more attention, and ones where customers can see themselves make them feel more secure using your machine.

If you struggled with internet service this year, you might want to consider purchasing a wireless device. This gives you more control over your connection and service without having to coordinate with the location’s internet service provider (ISP). More reliable internet service means that you are able to provide more reliable ATM service which could improve your business this coming year.

5. Update Security

Speaking of using more technology and implementing updates and upgrades, you will want to think about improving your security, too. 

It can be overwhelming (and expensive) to spring for every feature available for ATM machines when you are just getting started. Purchasing an ATM machine itself is a financial commitment even without all of the add-ons.

So, if you’ve been in business for a while, have made some revenue, and feel more comfortable, it might be time to improve your ATM security. Security cameras, GPS trackers, and online monitoring are great ways to protect your assets and your customers. You also want to update your software to protect against software hacks that can cause your machine to malfunction.

There are other security measures you can implement, too. For example, think about switching up your vaulting schedule to be less predictable. Or, if you hire out any of your business processes, get rid of anyone you don’t trust. Alternatively, if you are wanting to work less in your business, hire people you do trust to take over the parts of the business you no longer enjoy.

Still haven’t purchased ATM insurance?  Could you benefit from peace of mind? Are you in a better position to add the expense? It’s something to think about as you prepare your business for the new year.

6. Get Business Processes Down on Paper

To really have an organized business, it’s a good idea to document your business processes and practices. Get all parties and their responsibilities down on paper. Revisit, review, and update any contracts you have with location owners or third party partners.

The new year is a good time to make sure all of your ATM business processes are running smoothly and that you are comfortable with them. If they aren’t, you will need to get your business back on track. Make sure that each person involved in your business knows the processes and adheres to the practices you have laid out.

7. Clean Up

Finally, make sure your business is clean going into the new year. Clean the area around your ATM machine. Sweep, dust, polish, and sanitize. If any stickers are peeling, replace them! A clean machine is more attractive to passersby and puts you a step above the competition. Plus, it’s just a good way to enter the new year: fresh!

What Are Your ATM Business New Year Resolutions?

Now that you’ve seen 7 of our ATM business new year resolutions suggestions, it’s time to make your own list. What goals do you have for your business this year? What changes do you need to make? Is there anything you want to start doing? Stop doing? 

And if things are going great, keep up the good work! What do you need to keep doing? And how can you prepare for obstacles you might have luckily avoided in the past?

It’s never too late to be prepared. There is always room for improvement. Remember that as trends and markets change, so should your business. Pay attention to who your customers are and what their needs are. That’s where you will find the most success.

This new year, those of us at ATM Depot wish you nothing less than prosperity!

Cash App Taxes Could Increase ATM Usage

Cash app taxes could increase ATM usage. Many small businesses, freelancers, and those employed in part-time work who rely on cash apps, or payment applications, might have a new tax form to file next year. 

Now, just $600 in online payments will trigger form 1099-K. What does this mean for payment app users? What does this mean for independent ATM deployers (IADs)? 

Well, increased tax reporting and scrutiny could push many small businesses and self-employed individuals to encourage or limit themselves to cash transactions. And more cash transactions means more cash withdrawals and more ATM business.

What are Payment Apps?

Payment apps allow person to person (p2p) transactions. Whether payment is for goods and services or for monetary gifts or reimbursement, payment apps are a quick, convenient, free way to send money to people you know and trust. 

Payment apps are popular alternatives to cash because they allow users to pay for goods and services and share money among friends and family without needing to carry a wallet. Payments are now immediate. You don’t have to worry about going to the bank or about someone forgetting to “get you back.” 

Payment apps work by linking debit cards, bank accounts, and sometimes credit card information and securely storing it to send and receive money right from your phone. No wallet needs to be present, you aren’t limited to in-person transactions, and in some cases payments can even be made internationally.

The biggest draw is that they are free to use. The only nominal fees are for expedited or extra services.

What are the Most Popular Payment Apps?

The convenience of payment apps has made them quite popular. Some of the most popular payment apps in 2022 are PayPal, Venmo, Cash App, and Zelle. Each of these payment apps has millions of active users all over the world. And many people use more than one depending on their needs. 

Each app has its own niche, if you will. PayPal is the oldest payment app. It has earned the public’s trust because of its strong encryption technology used to keep user accounts secure. PayPal is a good option for freelancers and other business purposes because it offers an invoice feature that can be used to specify the nature of purchased goods and services.

Venmo is the most popular payment app for exchanging small amounts of money between friends and relatives. Need to spot a friend $5? Venmo. Need to pay your share of the rent? Venmo. Splitting a dinner bill? Venmo.

Cash App is another hassle-free way to send small amounts of money to contacts. Cash App doesn’t offer the social aspect Venmo does (a feed of who sent money to whom and for what). But it does offer users a digital wallet that enables the buying and selling of bitcoin. 

Zelle can be used independently as its own app. Most Zelle account holders, though, use the app through their banking app. Banks like Chase, Bank of America, and Wells Fargo use Zelle to allow their customers to send small amounts of money safely from their bank account. 

In order to use one app, both sender and recipient have to have it. So this can cause some people to have active accounts with multiple payment apps at one time.

Do Cash App Taxes Apply to All Transactions?

You might have heard about cash app taxes from unnecessarily worried peers or even seen something in the news. However, very little is actually changing in terms of tax laws.

Monetary gifts and reimbursement are still considered non-taxable income. So only those who receive payment for goods and services through a third-party app should expect to file a 1099-K form with their 2022 taxes next year.

What is a 1099-K Form?

Form 1099-K is a tax reporting form just like many others everyone has filed in their lifetime. It provides the IRS with information about the gross amount of payment transactions a person receives via third-party payment networks (like the ones listed above). 

The Good News

You are probably already familiar with this form if your gross payments exceeded $20,000, and you reported earnings if you had more than 200 payment transactions. The difference now is that rather than the $20,000 threshold, it’s $600. And rather than 200 transactions, the minimum is 1.

What this means is that more people will be filing form 1099-K next year than previously. More people receive at least $600 worth of income in a year paid via payment app than those who receive over $20,000.

These payment app companies are required to send a 1099-K to the tax filer as well as to the IRS. This actually simplifies tax filing! Say a freelancer or part-time worker has multiple streams of income paid through three different payment apps. Rather than hunting down and documenting information for each app separately, form 1099-K contains information about the gross amount of payment transactions made on any and all qualifying third-party payment networks.

So, whether individuals receive one $600 payment in exchange for goods or services or they receive thirty $20 payments, they should expect to receive a 1099-K form by January 31, 2023.

The Bad News

The problem is, it is possible for this form to reflect both taxable and nontaxable transactions. To prevent confusion and delayed tax filing, it might be a good idea to separate business and personal accounts. Otherwise, someone might end up paying more taxes than necessary. And to make sure they don’t, they’ll need to look at the information carefully and compare it to their (hopefully) carefully maintained records….

Those who only receive $600 via digital payment apps in a given year might not see the importance of separating this income from personal gifts and reimbursements or of maintaining records of it. Now that more people will have an extra form to file next year, more people might dread the extra time and responsibility of discerning the information.

However, self-employed individuals are and always have been required to report all earnings to the IRS when filing their tax returns. So those who aren’t trying to break the law don’t have anything to worry about!

Unfortunately, there could be a number of people receiving form 1099-K by mistake. Take, for example, the bride who worried that monetary gifts she received to help fund her honeymoon would be reported to the IRS and taxed. If she were to receive a 1099-K form, all she would have to do is prove that the money she received through digital payment apps was gifted and therefore nontaxable income.

Although this burden of proof might not be so easy for some people, it should be relatively easy to rectify. Mistakes should be reported to the third-party digital payment company who issued the payments. They will resolve the issue, not the IRS.

Why Are Cash App Taxes a Thing?

2021 American Rescue Plan Act

This new law concerning payment or cash app taxes is part of Joe Biden’s 2021 American Rescue Plan Act which was passed by the Democrats in March 2021. (You might be familiar with the additional stimulus payments, enhanced unemployment aid, and expanded child tax credit also covered by this bill.) 

As a result of the American Rescue Plan Act of 2021, any transactions made after March 11, 2021 that exceed $600 must be reported to the IRS, regardless of the number of those transactions. Prior to this legislation, third-party payment platforms would only report users who had more than 200 commercial transactions and made more than $20,000 in payments over the course of a year.

It’s important to remember that this bill doesn’t change tax laws, it only changes income reporting. Self-employed individuals have always had the responsibility of reporting income from all sources and paying taxes on it. Now, there is just another form in the mail, and it might include nontaxable income if people aren’t careful.

The purpose of this bill is to cut down on tax evasion. It allows the IRS to keep track of transactions made through payment apps that often go unreported. This digital trail keeps freelancers and other self-employed or part-time workers from not reporting or underreporting their earnings.

Tips for Taxpayers

In order to accurately report income, these apps will need additional information. They will need either an Employer Identification Number (EIN), Individual Tax Identification Number (ITIN), or Social Security Number (SSN). If this information is not already on file with the digital payment apps people use, they will be reaching out to users to confirm tax information due to this new law.

Remember, too, that only money received in exchange for goods and services should be reported and taxed. Nontaxable income includes monetary gifts (birthday, holiday, wedding), split bill payments, and other reimbursements. Any items sold at a loss are also nontaxable. Examples are items sold at a garage sale or on Facebook Marketplace. 

But those who purchase new items and resell them for profit should expect to report that income to the IRS. If they don’t, and they receive payment through a payment app, the IRS will know.

The new law requires that form 1099-K go to both the taxpayer and the IRS. So, there is a good chance that they will notice any discrepancies between federal income tax returns and income reports. Therefore, it’s important for individuals to report their taxable income and keep good records.

What Do Cash App Taxes Mean for IADs?

This new legislation affects anyone who receives earnings through digital payment apps instead of direct deposit, paper check, or cash. Those most likely to accept these types of payments are small businesses, freelancers, minors, and other self-employed, part-time workers.

About 1 in 4 Americans makes extra income online. It might be from selling something, renting something out, or providing online services. And global transactions associated with the gig economy are projected to grow to about $455 billion by 2023.

So anyone who doesn’t want their online income reported directly to the IRS will need to conduct more business using cash. Not to mention minors who earn income from mowing lawns, babysitting, caretaking, and other odd jobs.

It seems some kids will be learning about taxes a lot sooner than most. And it could result in their guardians covering these taxes, too. This is just more encouragement for minors and other part-time, odd-job workers to revert to relying on more cash payments. And that’s good news for the ATM industry.

Cash is King

We never believed that digital payment apps would replace cash to the extent that it becomes obsolete. This just confirms what we’ve been saying all along: Cash is king! 

It’s safe, it’s private, and it’s universal. Everyone has it, everyone can accept it, everyone can spend it. And as long as cash has a place in society, so will ATM machines and ATM businesses!

Convinced that there is no better time than now to start or scale your ATM business? ATM Depot can help. Contact us today to get started!

Cannabis Crypto: An Alternative Business Model for IADs

What do cannabis, crypto, and ATM businesses have in common? They are high-risk industries unsupported by the federal government. All three of these industries are prone to unlawful business practices. 

Not fully supported by the federal government, these businesses find it difficult to bank safely and affordably. Often, business owners have to find a work-around, pay ridiculous fees and taxes, and/or face extreme scrutiny and audits. 

Could cannabis crypto be an alternative business model for IADs that serves as a solution? Find out how the three industries overlap and can work together.

ATM Businesses as High-Risk Accounts

It’s no secret that many banks are hesitant to take on ATM business accounts. The cash-heavy nature of ATM businesses make them high-risk due to the potential for money laundering activity. Banks have to be especially wary of such liabilities. They are held responsible for servicing companies that conduct unlawful business practices. 

In 2021, the Office of the Comptroller of the Currency (OCC) finalized its rule to ensure fair access to banking services by various financial institutions. This means that banks cannot make blanket decisions for whole categories of customers when provisioning certain services. Instead, they must conduct individual risk assessments for each customer.

However, many ATM owners still report difficulty finding ATM business-friendly banks. That’s probably because of the difficulty in making a good impression during the risk assessment….

Not only are ATM business accounts risky for banks to service, they are also expensive. The potential for audits, compliance reviews, investigations, and regulation changes are heightened for banks that do take on ATM business accounts. 

They also face federal penalties for servicing a company that engages in money-laundering activity or fraud. Banks that service ATM businesses have to meet their cash needs as well. It can be costly to order the cash necessary and make drop-off arrangements. 

These costs might be manageable for larger banks, but they are notoriously less likely to take on ATM business accounts due to the scrutiny they already face. And smaller banks are less likely to take on the extra costs. Therefore, there are few banks that IADs consider ATM-business friendly. And the ones that are can still close accounts at any time with little to no warning.

This uncertainty is a costly threat to ATM business owners. They cannot consistently provide their service if their access to cash is disrupted abruptly.

Cannabis Illegal Under Federal Law

Similar to ATM businesses, legal cannabis businesses also struggle to find access to safe, affordable banking. Although legal in many states, whether medicinal or recreational, cannabis is still illegal under federal law. This means that banks, federal institutions, are bound by certain regulations when it comes to providing services to businesses in the cannabis industry. 

Dispensaries cannot accept debit and credit transactions for cannabis-related goods and services. Since cannabis is illegal at the federal level, banks and credit card companies won’t allow these transactions to take place over their networks. And banks have to tread lightly to avoid breaking money laundering laws or servicing businesses that engage in illegal business practices.

That leaves dispensaries no option but to accept cash exclusively. You can imagine the risks this poses to these businesses. Not to mention the costs. 

Barred from the traditional banking system, dispensaries are forced to pay excessive fees to bank at state-chartered institutions or hoard cash on-site. And keeping cash on-site is not a cheap alternative. This makes dispensaries targets for robberies and increases the level of internal theft.

Add to that the costs of increased security such as safes, cash-counting equipment, cameras, weapon detectors, and other physical reinforcements. And to combat internal theft, there are the costs of background checks and training.

Nor is cash a hassle-free alternative. Cash transactions in the cannabis industry are especially subject to meticulously scrutinized payment and tax speculation. This causes dispensary owners to fear federal-level accusations of illegal or suspicious business practices.

The stigma surrounding the cannabis industry for the potential of criminal activity hurts dispensaries’ ability to provide legal goods and services to their customers.

Crypto Not Accepted as Legal Tender

Although a popular payment solution for many reasons, cryptocurrency is not accepted as a legal tender. It is a high-risk investment because of its volatility. Furthermore, since it’s a decentralized currency, it is difficult to regulate and, more importantly, to tax. 

“[Crypto-savvy retailers] will accept cryptocurrency payments and be exposed to either capital-gains risk or the risk that these currencies will lose their value suddenly and without warning when tax payments and rent are due,” says Khurshid Khoja. The unpredictable nature of crypto makes it impossible to rely on 100%. This means that businesses still must depend on banks for operations such as payroll, taxes, and other expenses like utilities.

Anyone can use cryptocurrency to purchase goods and services. But because it lacks the qualities of traditional currency, it isn’t considered a legal tender. Therefore, although it may be a convenient form of exchange for consumers, merchants run into complications when accepting it. Add this to the number of complications cannabis businesses that want to accept crypto payments already face.

SAFE Banking Act

The Secure and Fair Enforcement (SAFE) Banking Act is intended to give companies access to banking services that are currently unavailable. The SAFE Act would eliminate penalties for financial institutions that provide services to cannabis businesses. Therefore, it would prevent cannabis businesses from experiencing unexpected account closures.

It has passed multiple times in the House but has yet to be approved by the Senate. Without it, the cannabis industry lacks access to loans, capital, and basic bank accounts. 

The SAFE Banking Act would also allow dispensaries to minimize the amount of cash they store on-site. This would in turn minimize the amount of robberies they experience. This contributes to the overall safety of dispensary workers and the surrounding communities.

Cannabis Crypto: A Possible Solution

The Problem

Cannabis locations are already prime locations for ATM placement due to their reliance on cash transactions. Additionally, because of the nature of the business, cannabis dispensaries are not authorized to own or operate ATM machines. 

They’ve even run into problems with cashless ATM machines. Visa prohibits their use because oftentimes point-of-sale (POS) purchases get miscoded as ATM cash disbursements but do not actually disburse cash which affects the interchange.

So dispensaries cannot accept debit or credit transactions, and cash transactions are a liability. But what about crypto payments? According to Cheyenne Ligon and Sage D. Young, crypto isn’t a fool proof solution, but it’s a start. 

Benefits for Dispensaries

First of all, the blockchain associated with cryptocurrency allows dispensaries to process payments affordably and prevents them having to go through third-party processors. Furthermore, crypto wallets offer a level of security not provided by the traditional banking system. 

While the federal government is concerned about the use of crypto in illegal activities such as money laundering and tax evasion, the crypto wallets actually ensure accurate reporting by using the blockchain as an audit trail. It can indicate how businesses receive payment and from which wallets.

Cannabis crypto also benefits customers by offering them a safe and convenient alternative to cash or card payments. “Crypto transactions make paying for cannabis goods and services more accessible, as anyone with a smartphone can make a low-cost transaction,” says Casia Lanier.

Although the number of crypto users is relatively low, it is increasing steadily. The more businesses that accept and promote crypto payments, the more public perception crypto will receive, and the more widely accepted it will become.

For those in the business of cannabis, crypto-to-cash payment platforms have encouraged the crypto-curious to take the leap. Benefits include less volatility and guaranteed compliance.

More and more dispensaries will be moving to cannabis crypto payments, if for no other reason, for an alternative to traditional banking services that aren’t available for them today.

The rise of instant crypto-to-cash payment platforms has helped some crypto-curious cannabis companies feel more comfortable about accepting crypto payments, both in terms of avoiding volatility and ensuring compliance with regulations. 

According to Lanier, “the potential for crypto transactions becoming accepted forms of payment is high, and the barriers to entry are almost non-existent for businesses across every industry…For businesses thinking of integrating crypto payment solutions, there is no better time to do it than now.”

Cannabis Crypto an Alternative Business Model for IADs

This is good news for IADs. Cannabis crypto provides ATM owners with a new and relatively untapped market for machine placements and uses. 

Bitcoin ATM machines (BTMs) function very much in the same way as regular ATM machines. This makes them approachable and user-friendly for business owners, consumers, and IADs. 

By offering BTM services to cannabis businesses, IADs can bring cannabis, crypto, and ATM industries together to bypass traditional federal banking regulations that so often shut these businesses out.

Want to convert your ATM machine into a BTM? Interested in getting into the cryptocurrency game? Contact us today to discuss your options!