Why cash is still king at Boston's no-plastic restaurants
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Illustration: Gabriella Turrisi/Axios
Even a brutal economy can't kill Boston's cash-only restaurants and bars.
Why it matters: As a diner, you probably love the ease of tap-to-pay, but the restaurants that insist on keeping things old-school are also making life cheaper for you.
The big picture: Costs for taking credit cards are increasing faster than food and labor costs, according to the Massachusetts Restaurant Association.
- So much so that credit card processing has become the third-highest operational expense for restaurants.
Zoom in: Processing fees hit restaurants harder than other industries because they're charged on the full transaction amount, which includes local and state sales tax as well as the tips.
- "They're paying to process 20% of that revenue that doesn't even come to their bottom line," MRA president Stephen Clark tells Axios.
State of play: Few cash-only establishments remain in Greater Boston. They're primarily neighborhood bars and older, family-operated breakfast and lunch spots.
- They rely on loyal customers who know the drill and bring cash.
- For anyone else turning their pockets inside out and trying to tap their phone on an analog cash register, there's usually an ATM in the back that'll kick the processing fee onto the customer.
Some of Boston's best-known spots still don't allow plastic.
- Neighborhood bars like The Delux in the South End, Cafe Porto Bello in Southie, Brendan Behan in JP and countless small dives insist on cash.
- Eateries with loyal customers like Brookline Lunch in Cambridge and even a tourist hotspot like Mike's Pastry in the North End are keeping payments analog.
The intrigue: Cash customers actually subsidize credit card users, according to Federal Reserve Bank research, because businesses build processing costs into food and drink prices.
- If you pay with a card, prices reflect the charge fee.
- If you bring cash to a place that also takes cards, you're still paying that higher price unless there's a cash discount.
Friction point: While cash-only policies help avoid processing fees, they create market disadvantages for the old-fashioned spots.
- Clark noted these cash-only places lose potential customers unwilling to seek out ATMs.
- But they're not likely the kind of business looking to expand, so the if-it-aint'-broke ethos persists.
The bottom line: Consumer payment preferences continue shifting toward digital methods, including table-side terminals and phone-tapping systems like Google Wallet and Apple Pay.
- But the cash-only diehards aren't going anywhere.