Navigating the evolving terrain of retail payments involves understanding a range of transaction methods—chief among them, cash and electronic payments. While both have their merits, they also come with distinct challenges. To gain a comprehensive view, let’s break down the pros and cons from the perspectives of various stakeholders: retailers, customers, banks, tax authorities, and even criminals.

Retailers

Pros of Accepting Electronic Payments

1. Faster Transactions: Potentially quicker checkouts mean happier customers and potentially more sales.
2. Reduced Overhead: Less need for secure cash storage and transportation.
3. Detailed Reporting: Advanced analytics tools provide valuable business insights.
4. Less physical contact: Reduces the potential for disease transmission.

Cons

1. Transaction Fees: Fees can eat into profit margins. In some countries (e.g. the UK since 2018) it’s illegal for retailers to levy a surcharge for non-cash payments to compensate for those transactions fees.
2. Technical Issues: Systems can go offline, affecting sales and customer experience.

Pros of Accepting Cash

1. Zero Transaction Fees: Avoids the percentage-based fees of electronic payments.
2. No Downtime: Cash transactions are independent of technological infrastructures.

Cons

1. Security Risk: Holding cash on-site increases the potential for theft.
2. Administrative Burden: Cash management requires meticulous accounting.
3. Bank Fees for Cash Handling: Banks often charge retailers for handling large amounts of cash, adding to costs.
4. Post-pandemic concerns of virus transmission through physical contact.

Customers

Pros of Electronic Payments

1. Convenience: Effortless and quick transactions.
2. Rewards: Various reward points or cashback opportunities.

Cons

1. Security Concerns: Risk of data breaches.
2. Inclusivity: Digital methods are not accessible to everyone, especially the unbanked.

Pros of Cash Payments

1. Privacy: Cash transactions are mostly anonymous.
2. Accessibility: Cash is universally acceptable (but increasingly less so as some businesses go completely cashless).

Cons

1. Inconvenience: The need and risk of  carrying and managing physical money.

Banks and Merchant Service Providers

Pros of Electronic Payments

1. Revenue Streams: Transaction fees are a lucrative source of income.
2. Data Analytics: Valuable insights can be gained from payment data.

Cons

1. Infrastructure Costs: Maintaining secure and reliable systems can be expensive.

Tax Authorities

Pros of Electronic Payments

1. Transparency: Easy to track, aiding in tax compliance.

Cons

1. Complex Regulations: The fast-changing digital payment landscape requires ongoing legislative attention.

Pros of Cash Payments

1. Simplicity: Cash transactions are straightforward but hard to monitor.

Cons

1. Evasion Risks: Easier to under-report income, leading to tax evasion.

Criminals

Pros of Electronic Payments

1. Fraud Opportunities: Digital landscapes can be more lucrative targets for illicit activities.

Cons

1. Traceability: Electronic footprints can lead to easier detection.

Pros of Cash Payments

1. Anonymity: Harder to trace and less risky from a detection standpoint.

Cons

1. Logistical Challenges: Planning a heist or laundering cash requires more physical effort and risks.

In summary, whether to go cashless, cash-only, or maintain a mix is a complex decision involving many factors and stakeholders. Adding to the equation are the costs that even traditional methods like cash can incur, such as bank handling fees. As the retail world continues to evolve, a balanced payment strategy that considers all angles is not just desirable but essential.

This much is for certain: the lower the transaction costs to the retailer, the more attractive it should be for them to accept electonic payment methods, and the less likely they are to lose the business of people who don’t normally carry cash.