There are a number of reasons why businesses prefer people to pay with cash instead of other payment methods. Some of these include:
- No need to pay expensive credit card transaction fees
- No need to pay bank processing fees
- Tax avoidance
Now quite often these fees will be passed onto the consumer, however, sometimes businesses will meet you half way and offer you discounts if you pay with cash. I know there is a store near where I live that offers deals on cash payment over credit card. It’s an electronics store and when you are buying something expensive it can mean you save anywhere from 1-2% on the total cost of the transaction.
Most commonly cash seems to be an advantage over other types of payments when you hire individual contractors. If you ever get offered by an individual contractor to do say some landscaping or something else around the house, often this will be so that the contractor can avoid paying income tax on the money for doing the work.
Avoiding paying income tax is completely illegal in almost every country that I’m aware of, but it happens all the time, and often it can save both the person doing the work and the person needing the work done a lot of money. I’m not condoning this type of behavior, merely identifying that it does happen a lot.