8 Insights On The Cashless Revolution At The Portland Food Carts

Simple and streamlined to the core, it’s no wonder the ancient art of street food vending has blossomed with the increasingly fast pace of life. The humble food cart fully launched into the modern era with the introduction of mobile payment processing solutions offered by companies like Square. With pricing and equipment tailored for low-volume/low-ticket vendors, a mobile food revolution quickly took shape.

Food carts and their mobile kin have proven a fertile testing ground for this new era of payments. So much so, in fact, that a handful of forward-thinking food truck entrepreneurs have even taken the plunge into cashless territory in the last couple of years.

But to what extent has mobile processing truly caught on in the deeply cash-entrenched street food industry? Do food trucks and other small, speedy businesses need to jump on the cashless bandwagon now, for fear of missing out?

Curious to hear the word on the (literal) street, I set off late one morning to the food carts in my hometown of Portland, Oregon for a self-guided mobile payment processing tour. In case you haven’t had the pleasure of a visit, the downtown Portland “pods” are collections of mostly permanent carts that both represent and reflect the city’s earthy, hipster quality. I wondered if the on-trend Rose City would be a prime spot for the cashless revolution to gain ground, particularly since it’s not illegal in Oregon to refuse cash. And I’d get to eat a Honkin’ Huge Burrito for my trouble. Yum.

Here are the non-edible takeaways from my visit to the carts as they prepared for the lunch rush.

1. Approximately 9 out of 10 carts in downtown Portland accept cards.

Cash is no longer technically king. I was surprised at first, but then realized most of my fellow cart-goers were firmly in the card-friendly demographic: professionals, students, and the occasional tourist. Still, this is a pretty dramatic turnaround from the days of all cash.

2. Approximately 9 out of 10 carts that accept cards use Square (see our review).

Square now reigns supreme. I assumed this percentage would be high, but didn’t imagine Square would be essentially ubiquitous.

3. One owner said he’d probably still use Square even if he’s offered better rates, because his customers trust it.

Brand recognition is still key right now, because handing your card over to a stranger in a tiny shack to be swiped into a phone can still feel vulnerable. Seeing Square at cart after cart has created a positive feedback loop of comfort with the whole system.

4. Most carts report that half or more of their transactions are on cards, with many reporting 60-80%.

Downtown customers prefer plastic, even for small transactions. While I felt the cashless revolution really creeping up by this point, 80% is still nowhere near 100%.

5. Owners reported only a couple “tap-and-pay” transactions per day, if any.

We still have a long way to go before mobile wallets become the norm, despite Portland’s relatively high rate of NFC transactions and Square’s recent #PayFasterPortland campaign. I was a little surprised, if only because everyone around me was glued to a phone.

6. Some carts using Square still invoke a $0.50 convenience fee for any card use (credit or debit) that kicks in automatically at around $6.50.

Although charging up to 4% convenience fee is legal in Oregon and 39 other states for credit card transactions, but definitely not for debit cards, carts don’t follow this rule and it’s not strictly enforced. Square swooped in and saved the day for low-volume/low-ticket carts by charging a flat 2.75% per transaction. But in an ironic twist, some carts still apply a fixed fee to their customers’ small transactions. To save you the math, 4% of $6.50 is only $0.26, and 2.75% of $6.50 is only $0.18.

7. Some merchants feel more secure taking cards.

One operator took away his tip jar and sometimes refuses cash. His transactions are now 95% card-based. Subtle changes could gradually bring on more functionally cashless carts, even without an official policy in place.

8. Most owners said they could never foresee a situation where they’d stop accepting cash.

A few actually laughed in my face when I asked.

By the time the crowds picked up, I was feeling fairly confident that the Portland Food Carts would be spared a little longer from the cashless revolution. Yet even my morning’s walk through town revealed that the infrastructure is already in place for a future cashless society, from corporate giants like Starbucks all the way down to neighborhood street vendors. And although alternatives exist, Square has truly been the backbone of the transition for these smaller food vendors that were all-cash in such recent memory.

I brought cash on my visit to the carts, but the owner of Honkin’ Huge Burritos started using Square in 2014 after 22 years in business. Next time, I’ll probably use plastic too.