Should You Enable Cash Payment At Your KIosks

Should the Operator of a kiosk enable cash payment at their kiosks?

Such a question appears to be broad – because it is – and irrelevant to some readers – because it is!

Because just like “there’s an app for that”, there’s a kiosk for that; there is a wide application space for kiosks. Many kiosk categories won’t have in their functionality any need, let a lone opportunity, for payment. For example, wayfinding kiosks will have no need for payment, whether with cash or cashless.

On the other hand, many kiosk applications will have a payment element. I would divide those applications into two buckets: one where payment will or should be mandatory, and the other where payment might present itself as an interesting value add.

Examples of applications where payment (cash or cashless) is mandatory include:

• Self-checkout kiosks
• Bill payment kiosks
• Crypto ATMs (yes, it’s a kiosk despite it having “ATM” in the name)
• Carwash kiosks
• Laundromat kiosks

The above application examples must include payment enablement simply because the whole purpose of the kiosk revolves around it. Put differently, the functionality of the kiosk cannot be fulfilled without payment.

Editors note – regional differences come into play.  Some countries in Europe love using cash. In Oklahoma, I checked with McDonald’s located on interstate 40 and almost 50% cash even with the kiosks. And then there are checks — those people paying for their mobile phone at the AT&T or Verizon kiosk use checks 15% of the time. Even higher at your DMV kiosk renewal.

Examples of applications where payment might present an interesting value-add:

• Healthcare kiosks (patient check-in)
• Hotel check-in/check-out kiosks

These two types of kiosks can achieve their purpose (the identification of an individual for different purposes depending on the vertical) without allowing for payment. Payment enablement, however, might present a value add in both applications if the cost of such enablement is commensurate with the benefit.

• Patient check-in kiosks can be used to enable co-pay payment, whether in cash or with card.

• Hotel check-in and check-out kiosks can enable payment for the room (with its hold) and incidentals, or payment for items taken from the micro-market (if present, usually near the reception area).

Truth be told, though, payment enablement with cash presents a tenuous ROI in these two applications because it would require the use of recyclers rather than acceptors, which are significantly more expensive, straining the ROI. Enabling payment with cashless presents a more reasonable ROI timeframe for those applications.

Why is cash payment enablement mandatory in the first set of applications? Why is cash enablement needed sometimes to begin with? Everyone I know has credit cards!

So first, a bit of a background around demographics.

Cash Demographics in the US

“Who still pays with cash anyway?”

I am sure you’ve heard this, especially from younger generations. So, let’s examine the facts.

The Federal Reserve routinely publishes a report entitled: “Findings from the Diary of Consumer Payment Choice”. In the 2025, edition, one can certainly see that the share of cash as a payment instrument has been declining.

Figure 1. Share of Payment Instrument Use for All Payments

In less than a decade, the share of cash as a payment instrument has been cut in less than half, losing ground primarily to credit cards. That should not be surprising, especially because contactless technology made its way to cards, with card networks lowering transaction fees for tap payments, with the explicit target of taking market share from cash. The strategy clearly seems to have worked. Moreover, Covid appears to have played a major role in accelerating adoption of tapping by consumers, as no one wanted to touch dirty cash, and neither did they want to touch the PIN number buttons on those credit card terminals.

But comparing percentages might be deceiving. What about the actual number of times cash is used for payment vs. the other instruments?

The second figure below outlines the average number of monthly payments for each payment instrument.
Figure 2. Average Number of Total Payments

The following can be ascertained from the above chart:

• The “halving” phenomenon also exhibited itself in count of cash payments (and not just percentages)
• Covid dealt a strong blow to cash usage, cutting the number of events by 40%.
• While cash usage has stabilized, it has failed to recover from that below, staying flat at 7 times a month.

Has cash usage therefore flattened? Will it continue to decline further? My crystal ball doesn’t seem to be conclusive!

But one thing is for sure, there is a segment of the population which has no choice but to pay with cash. That’s because they don’t have a card or have very little access to formal banking services.

The FDIC publishes the result of a survey of the Banking status of US households every 2 years. Since the 2025 report is not out yet, we will continue to use the findings of the 2023 one.

Significant progress has been made in the last 14 years to improve the financial inclusion of US households. The percentage of Unbanked households dropped from 8.2% in 2011 to half of that at 4.2% in 2023 (see Figure 3).

Figure 3. National Unbanked Rate (%)

Unfortunately, the progress in financial inclusion has still not led us to a society where all races or ethnic groups have reached the same level of banking status. Figure 4 below shows that non-white ethnic groups suffer from significantly higher Unbanked rates than whites.

Figure 4. Unbanked Rates by Race and Ethnicity

Remember, Unbanked households can use only cash or must resort to other alternative methods like prepaid cards if they will need to pay in cashless (e.g. for online commerce).

But there’s another category of households to consider which is the Underbanked. This is a category of households that does have a bank account, but is forced to resort to the usage of alternative nonbank financial services such as check cashing, payday loans, pawn shops etc. These alternative methods typically leave these households with cash as the only method (unless they resort to prepaid cards).

The percentage of Underbanked households was 14.2% in 2023, down from 20.1% in 2011. As in the case of Unbanked households, minority households were significantly more likely to be Underbanked than white households.

Moral of the story: different demographics, as well as income profiles (lower income households are more likely to rely on cash only) will have different needs for cash payment.

Framework for Cash Enablement in Kiosks

So, when do you need to enable cash payment in kiosks? Well, we’ve partially answered that question by outlining first that there is a “bucket” of applications for which payment (not necessarily with cash) enablement is mandatory.

The decision to enable cash payment in those applications hinges on the following parameters:

• Demographics of users of the kiosk
• Type of organization deploying the kiosk for its demographics
• Average ticket price to be paid at the kiosk
• Nature of the kiosk application
• Local regulation
• Transaction processing costs

Let’s examine each of these parameters one by one.

USER DEMOGRAPHICS

As highlighted in the above section entitled “Cash Demographics in the US”, there is a segment of the population that is more heavily dependent on the use of cash. If you believe your underlying client/customer base includes a significant portion of this demographic, then there’s a higher probability that cash enablement at the kiosk will be necessary. If you don’t, you could be unintentionally discriminating against a portion of your client/customer base and potentially losing business as a result (where your services or products are a discretionary purchase).

In laundromats, for example, chances are a good portion of your client base is in a lower income bracket and therefore it behooves the laundromat operator to allow cash payment.

In the self-checkout space, your need to include cash payment at the SCO or not depends on your segment. High end Retailers like Whole Foods, for example, or Wegmans, don’t need to enable cash at the SCO. But a Dollar store must.

Now, I have heard some advocate that a grocer should automate a percentage of their SCOs corresponding to the percentage of revenue (or transactions) they have with cash. While that seems sensible at a high level, I am not sure how the grocer will manage the lineup of people looking to checkout. There’s no way anyone can predict the sequence of cash and cashless paying carts in the queue. The only way it could be managed properly is if you have two areas, one for cash SCOs and one for cashless-only SCOs. Or if a cart is not involved (e.g. drugstore).

One final note about cash demographics. It can really surprise you! One often hears that cash enablement is more critical in rural areas vs. urban areas. That’s not necessarily true, particularly when it comes to large concentrations of the immigrant labor force, which tends to concentrate more in large urban centers (because that’s where the jobs are).

ORGANIZATION TYPE

Are you a for-profit organization or business? Or are you an organization serving the public as a civic duty capacity (e.g. municipality)?

If you’re a municipality deploying kiosk for utility payment, or at the DMV, cash payment at the kiosk should be enabled. Otherwise, you would be serving certain segments of your citizenry less than others. No public service should do that!

However, if you’re a business, then the decision is more complex than that. If you’re a mobile carrier deploying kiosks for prepaid (or even postpaid) plans, or to pay for, say, purchase of phone accessories, you might or might not deploy kiosks with cash payment. Consider this, though: people who come into the store to pay for mobile usage are generally not the ones that are likely to pay using their phone to pay online with their credit card (otherwise, the kiosk deployment would sort of defeat the purpose).

AVERAGE TICKET PRICE

This is an important one because many studies show that the propensity to pay with cash decreases dramatically with higher ticket prices. Cash as a payment instrument has a much higher share in micropayments (i.e. ticket prices lower than $25). If the Average Transaction Price at your kiosk is a $100 or more, for example, you may not need to enable cash.

KIOSK APPLICATION

An exception for high ticket prices as a predictor for cash vs. card payment, though, is loan payback (or rent payment) kiosks. There’s a good chance the person using the kiosk has cash at hand for payment.

And so, finally, it depends on the kiosk application. If you’re deploying crypto ATMs, well it goes without saying you will have to enable cash payment (duh!). What about carwash kiosks? Maybe. SCOs? Depends on your market positioning.
Bill Payment? For the most part, yes!

LOCAL REGULATION

All businesses must comply with local laws and regulations. To that extent, there is an increasing number of cities and locales in the US that are mandating that businesses accept cash. Such laws are being enacted to protect the less fortunate segment of the population that is heavily or solely reliant on cash.

Major metropolitan centers like New York City, Philadelphia, San Francisco, Detroit and Washington, D.C. all have their version of laws mandating cash acceptance (or prohibiting cashless stores). Massachusetts, New Jersey, Rhode Island and Connecticut have state-wide laws to the same effect.

What does it mean to your kiosks? Well, if you’re planning to eliminate the cash register all together and going self-service only (seems to be McDonald’s future direction), then you will have to enable cash payment at least at one or a portion of your kiosks. That said, if a cash register remains open where you will accept cash payments, you are deemed in compliance.

TRANSACTION PROCESSING COSTS

This one by far is the trickiest and will be addressed with a separate article. Cashless transaction processing costs can be hefty and have certainly been increasing steadily over the past two decades. The cashless transaction processing structure could be so convoluted sometimes that it is difficult for the Finance department to articulate what the real costs is. Put simply, it is comprised of fixed and variable costs with a lot of “ifs and buts”.

Cash management also comes with its own costs. There’s also the risk of shrinkage with cash.

But either way, a comparison of the costs of cash and cashless acceptance should be made as an additional factor in the decision to enable cash payment at the kiosk (or not).

And Finally, Which Device Type to Use for Cash Enablement?

If you’ve made your decision to enable cash payment at the self-service kiosk, your next decision node is what kind of devices to use. Do you enable payment with coin? Or only banknotes? Do you expect to return change?

Here are some thoughts:

• Coin input is not worth it in most bill payment applications, and certainly not in carwash. In SCOs? It’s always been there, and has solidly moved to coin recycling, simply because the accept + dispense architecture for coins in SCOs is not worth it. The only reason, IMO, that coin input makes sense in a SCO, is when coin recyclers are used. It significantly reduces the cost of coin change procurement for change dispensing.
• More importantly, do you simply accept banknotes, or will you have to return banknotes for change, at which point you must decide whether to use a recycler or an accept plus dispense architecture? The answer to this one is very nuanced and best served with an article of its own.
• A cost-benefit analysis (not complex, just an Excel spreadsheet model) should be constructed to determine which cash payment architecture is best for your operation.

In Conclusion…

The decision to enable cash payment at kiosks is a nuanced one. For some applications, it is a must, but for others, it is a more complex decision which takes into consideration multiple factors. The decision-making criteria are summarized in Table 1 below.

 

Addendum – More Bill Pay Resources

• Payment Kiosk and Bill Pay Kiosk – Kiosk Industry
• McDonald’s Type Kiosk – Integrated Cash and Coin
• Cash Recycler For Bill Payment Kiosks Micro Markets
• Prepaid Debit – Cash to Card Kiosk

Addendum – Here are some excellent articles to review

• How to Build a Field Service Offering for Kiosk OEMs — From Blueprint to Market Launch
• Service Offerings Kiosk OEMs: Why They Matter & How to Build Them
• SMB Service Solutions Small and Medium Business
• Understanding Hard and Soft Services by Olea Kiosks with hardware focus
• Ten Steps To a Rollout Success — An article on kiosk deployment by Ken Rogers with Deployment Logix Inc.

Addendum – What You Lose Going Cashless

• The social equity / exclusion cost: if a significant fraction of customers are unbanked/underbanked, refusing cash may create a barrier to accessing your service. This is especially relevant for public-service kiosks or essential-service kiosks (e.g. bill pay, parking, municipal services). There’s some mention, but perhaps not stressed enough. Several articles argue that cashless-only policies disproportionately impact low-income or marginalized populations. Innovation & Tech Today+2AppDirect+2

• Data privacy / surveillance concerns: cashless payments leave a digital trail, which some customers may find invasive, especially in sensitive contexts. Echoing broader critiques of digitizing payments. Wikipedia+1

• Technical failure / accessibility risk: if the kiosk’s card reader / network / digital payment backend fails, and you don’t accept cash, then users may be wholly unable to complete needed transactions.

Addendum – When Cashless Works—And When It Backfires

Cashless works brilliantly in:

• Airports

• College campuses

• High-income urban centers

• Tech-forward environments

Cashless backfires when:

• It excludes unbanked populations

• Local law mandates cash acceptance

• Card infrastructure is unstable

• Customers distrust digital payments

• Transaction fees eat margins