Are Merchant Facilities Cost Effective
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As an accountant, it’s always important to consider the cost-effectiveness of different business practices, including whether or not to have a merchant facility. This topic was brought to my attention during a recent lunch outing with my wife. We visited a lovely vegetarian eatery that was part of a plant nursery in one of Adelaide’s beachside suburbs. The meal was fantastic, but when it came time to pay, we were disappointed to find out that they only accepted cash. I quickly ran across the major road to a nearby service station to withdraw cash, returned to the eatery and paid the bill.

My wife and I were informed by the owner that they felt having a merchant facility was not cost-effective. But what does that really mean? A merchant facility usually has a monthly fee of around $30 and a transaction fee of up to 2% for credit cards and 1% for EFTPOS. Despite the fees, there are still costs associated with handling cash, including time spent at the bank counting and depositing money and the potential of losing customers who prefer card payments, like me.

In my business, I have an employee who is responsible for handling the deposit forms, counting cash, and cheques and visiting the bank. The cost of their time, including wages and on-costs, would be at least $35 per hour. Of course, I could handle the banking myself, but my time as a business owner is worth much more than $35 per hour.

Based on this, it seems that the business we visited either doesn’t have a dedicated staff member to handle banking or they don’t place a value on their time in the business.


In conclusion, while having a merchant facility comes with its own costs, it is important to weigh the benefits against the costs of handling cash. A merchant facility can increase efficiency and reduce the risk of theft, while also accommodating customers who prefer to pay by card. A business owner should take into consideration all the factors and make an informed decision that is in the best interest of their business.

Please let me know your thoughts in the comments below, do you think accepting cards is good or not?

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1 Comment

  1. This business owner is still more interested in collecting ‘cash for cash sake’, from your pocket to theirs. Sad that it will not reflect as earnings if and when they decide to sell the business. That can be the only reason in this day and age, when we all are 95% EFTPOS, that anybody would only accept cash. It seems to be more common with smaller accommodation and dining facilities.

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