Tag Archive for: cash payments

ATM Placement: Top 13 Cash-Only Businesses

by

Cash-only businesses are prime locations for ATM placements. Why? Well because of the demand for cash of course! With the prevalence of debit and credit cards and other digital payment methods like ApplePay and GooglePay and even Bitcoin, it might seem like cash is dying out. We’re here to tell you that it’s not.

Cash will always have its place in society because it is tangible, it is traditional, and it is immediate. When goods and services are paid for in cash, the transaction is over. Done. There’s no hassle, no technology, no extra fees, no paper trail, no wait time, and no reversals.

So, if you find a business that is cash only, try to get an ATM placement there. Because many people no longer carry cash unless they plan ahead. And when customers visit cash-only businesses and they don’t have any, your ATM machine then gets that business. Want to know where to find cash-only businesses? Keep reading. 

Why Are There Still Cash-Only Businesses?

It might seem shocking (and maybe even a little inconvenient at times) that there are still cash-only businesses in this age of digital payments. However, don’t underestimate the power of the dollar bill. There are many reasons why some businesses in particular benefit from cash-only payments.

First of all, cash payment is immediate. There are no declined payments, invalid PIN issues, card swipe errors, etc. to deal with. There are also no fraud claims or chargebacks to handle (and pay for whether in time, fees, or lost product). 

Second of all, electronic payments require special equipment from the card reader to the network connection. Cash transactions can be processed rain or shine, with or without electricity or internet connection. This simplifies the transaction for many small businesses and minimizes extra equipment costs. It also ensures that transactions are processed smoothly without having to worry about technical issues.

Maybe most importantly, cash payments don’t cost the business anything to process. Every time a business processes a debit or credit card payment, it has to pay a processing fee. This is why you might see some businesses charge extra for debit and credit payments; it’s to help them cover these processing fees. 

So, not only are cash payments simpler for businesses, but they are then able to pass savings onto their customers by minimizing their operational costs. If you haven’t guessed already, small, local, “mom-and-pop” businesses benefit the most from cash-only payments. Many examples of these made our list of top 13 cash-only businesses.

Top 13 Cash-Only Businesses (In No Particular Order)

Food Truck Parks

Food truck parks make the list for a few reasons. They are trendy and popping up everywhere. If you can get an ATM placement in the vicinity of food trucks (where people gather to hang out, have fun, and spend money…), you are sure to see a reward. 

Food truck parks draw large crowds, especially on the weekends. This kind of regular, predictable business can make it easier for you to manage your own ATM business. 

Because each food truck vendor is its own small business, it’s common for some to accept cash only to simplify their business model and keep operational costs to a minimum. However, even if all food trucks aren’t cash-only, access to an ATM is still beneficial as cash can speed up transactions and reduce long lines and wait times. 

Small Local Gift Shops

Two keywords here: “small” and “local”. Again, small businesses benefit the most from cash payments because credit card processing fees cut too deep into their profits. Local shops and businesses are typically inherently small because their target audience is localized and limited. 

Furthermore, gift shop inventory is usually made up of tchotchke-like items. Cash-only payments make more sense for low-ticket sales because customers aren’t as concerned about paying off purchases over time.

Farmers Markets

Farmers markets are outdoor venues. This means that many booths don’t have access to power or strong, reliable internet connection for electronic payment processing. And while there are nifty workarounds like Square, farmers and other market vendors might not be tech savvy enough to bother. Add to this the simple, back-to-basics atmosphere of a farmer’s market, and you’ve got an increased demand for cash.

Laundromats

Not only are most laundromats still cash-only, it’s also a fairly reliable industry. Just like society won’t phase out cash any time soon, we also aren’t likely to phase out laundromats. There is more and more demand for laundromats as the population increases. 

There are also no large laundromat chains. This makes it easier to get an ATM placement since a small, local business isn’t likely to have the resources to partner with a bank for ATM service like a chain would. There are card-operated machines and even reloadable laundromat cards, but these often malfunction and are out of order. You want your ATM to be available when that happens.

Coffee Shops

With coffee shops, you’re again looking for small and local. Chains have the overhead and the reliable customer-base to be able to justify the credit card processing fees. Local coffee shops benefit more from cash-only payments and aren’t expected to offer a wide variety of payment options. 

Customers of small, local coffee shops go there for a simple, personalized experience. They know what to expect. And sometimes, that “cash only” sign even adds to the appeal.

Nail Salons

This is another booming industry. Nail technology is advancing, and “self-care” has become a term eagerly adopted by many and often applied to justify beauty services. 

The salon experience is enhanced by receiving services regularly. It isn’t enough to go once; you have to maintain your look. Therefore, regular salon-goers build relationships with salon employees over time. This increases their desire to pay with cash.

Some salons are cash-only because they are small businesses; nail salon chains are rare. But even if there’s a salon near you that does accept electronic payments, those employees are still encouraging their regulars to pay with cash because of the benefits. It’s an immediate payment, there are no payment processing fees, and it isn’t automatically taxed.

Cash payments are more personal, and when a nail technician gets comfortable with a customer, it becomes easier to request cash payments. That’s why nail salons make good ATM placements.

Barber Shops

Although your local barber shop or beauty parlor is probably not a chain, your payment isn’t always going directly to that shop itself. Many barbers and beauticians pay shops to rent a chair, space, equipment, etc. 

So while we might have you convinced that credit card processing fees hurt small business profits, think of what it can do to a freelancer or independent contractor’s already miniscule income. That processing fee is basically coming out of their paycheck. This is why you will find that many barber shops and beauty parlors are cash only. 

Mom-and-Pop Restaurants

Why are mom-and-pop restaurants often cash-only? You guessed it! They are small businesses that can’t always afford to have thousands of dollars of credit card processing fees cut out of their profit. Servers also rely heavily on tips for their income. Cash tips allow restaurant employees to take money home every night rather than waiting for a paycheck.

Additionally, depending on the age and/or location of the restaurant or business, it might not be set up for electronic payment processing. The technology in the location might be outdated, and businesses in rural areas might have troubles with weak, unreliable internet connection.

Or, the owners just might not have the savvy to handle the technical side of electronic payment processing. There is the traditional aspect to consider as well: “It’s the way we’ve always done it.” Sound familiar?  

Fairs/Carnivals

Fairs and carnivals are great opportunities for mobile ATMs. You can operate your ATM business seasonally or when these events are in town. Fairs and carnivals draw large crowds, and statistically, the more people who pass by your machine, the more transactions you’re likely to see. 

People also expect to spend money at fairs and carnivals. There’s food, drink, rides, games, vendors…. And one major convenience of cash for families is that it can easily be shared among members. When your kids want to do different things, just send them each off with a few bills to spend how they please. Would you be so giving of your card?

Flea Markets

Flea markets are good places to find a demand for cash because cash makes a good bargaining token. The price of most items at flea markets is negotiable, and the thought of an immediate cash payment is tempting to sellers. If a buyer can offer a cash payment, he or she can typically get a better deal. 

Craft/Art Shows

Vendors at craft and art shows don’t have the business resources to dedicate to payment processing equipment. Artists also make freelance-style, low income, so payment processing fees become an unfair burden. 

Marijuana Dispensaries

These opportunities are becoming harder to find because of the degree of necessity of cash at these locations. Because marijuana is still illegal at a federal level, marijuana dispensaries find it difficult to get payment processing companies (which are federal institutions) to work with them. Similarly, dispensaries are unable to operate their own ATM machines. 

This means that cash is the number one form of payment for marijuana dispensaries, and they are also top locations for independent ATM machines.

Christmas Tree Lots

A Christmas tree lot today, a fireworks stand tomorrow, these locations are great opportunities for mobile outdoor ATM machines. Due to the temporary, outdoor setting, electronic payment processing equipment can be an unnecessary hassle for these business owners. And, of course, Christmas Tree Lot Bob is in business for himself; he doesn’t want to pay credit card processing fees….

How to Find Cash-Only Businesses

Now you know what kinds of businesses are typically cash only, but how do you know which ones are near you without driving all over town?

Of course, you can check a business’s website to find out what forms of payment they accept. But this assumes that you already have an idea of a particular business or you’re just spending a ton of time online researching any business that comes to mind.

You can narrow your search by using online directories like Yelp and Yellow Pages and maybe even apply a “cash only” filter. Google Maps can provide you with business information, too, and can even go a step further by letting you know if there are already ATMs in the vicinity.

Other sources that can provide you with a business’s payment options include social media profiles and pages, personal experiences of family and friends, and review sites and forums like Reddit. But maybe the quickest, most efficient method is to simply conduct a web search: “cash-only businesses near me” or “cash-only businesses in (city) (zip code)”.

The most effective method is to call or visit a business in person. But again, for the sake of efficiency, you might do this in conjunction with another method above so that you only spend this time pursuing previously vetted leads.

How to Negotiate ATM Placement at Cash-Only Businesses

Negotiating ATM placement at cash-only businesses comes down to listing the benefits of cash payments. By placing an ATM at any small business, you encourage cash payments which minimizes credit card processing fees, pass the savings rather than the burden onto the customer, and avoid turning away cashless customers. 

Keep in mind, you don’t always have to look for strictly cash-only businesses for a good placement opportunity. You could find a small business that currently charges a fee for electronic payments. Or a small business that wants to move to cash only. All of these situations are good opportunities for ATM placement because of the demand for and benefits of cash. 

For more ATM machine placement and negotiation tips, check out ATMDepot.com’s Member’s Area where you can gain access to scripts and other helpful resources.

Cash App Taxes Could Increase ATM Usage

by

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!