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Cash is efficient

Categories : Cash is efficient, Costs of cash versus costs of electronic payment instruments
September 6, 2017
Tags : Asia, Cost of transactions, Costs of payments, Payment instruments, Payments competition
Cash allows users to track their spending real-time but it also frees merchants from unnecessary interchange fees.
Communication Team / Equipo de Comunicación

The tangibility of cash makes it the ideal payment method to see the evolution of one’s budget, real-time. Studies have found that there is an emotional attachment to it. In fact, there is a feeling of psychological pain when the user parts from cash, something that doesn’t occur when using alternative payment methods. But cash’s benefits aren’t limited to the emotional attachment. Cash can contribute to consumer health by decreasing alcohol and tobacco consumption and fighting impulsive shopping behaviors and obesity. It can also contribute to education and better management of one’s finances, at home or abroad

One of cash’s greatest attributes is that it is free for the consumer, but it also costs less for merchants. For the consumer, using cash incurs no costs whatsoever while the use of a card or mobile payment are often accompanied by a fee, not to mention if the payment is made abroad. For the merchant, cash does lead to some management and logistics costs but these are far less than the costs incurred when using Point of Sale (POS) terminals. It is no surprise that the race to get the largest piece of the pie in the payments landscape has almost become a war: a war on cash but also on other payment tools. In fact, in 2015 alone, payments generated $1.1 trillion, nearly 29% of global banking revenues. This number is expected to rise to $2 trillion by 2025!